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Sida 77 · Column Rob Looye
Column by Rob Looye
“Waiting for someone to ring the doorbell is not a sales strategy” – part 2
6. Make costs visible
any entrepreneurs responded positively to my first column: honest, direct, and without complicated models. That is why here is part 2, covering costs, budgeting, and profitability. Because revenue is great, but it is not sacred if you ever want to sell your company.
Employees can only manage margins if they understand the cost of choices. An extra courier, rush order, or correction round is quickly perceived as a service, but service is not free. Give your team insight.
7. Review contracts annually
1. Do not budget for growth to please a buyer
Software, subscriptions, lease agreements, and supplier prices creep up unnoticed. Ask annually: are we still using this, can it be cheaper, and does it still fit our organization?
Anyone who grows by zero to five percent for years must explain why that will suddenly become twenty percent next year. Does that growth come from new customers, higher prices, extra sales capacity, an acquisition, or a digital channel? “The market is picking up” is not a valid justification. Buyers pay for future cash flows, not for enthusiasm in a spreadsheet.
8. Manage monthly
Compare revenue, margin, and costs against your budget every month and intervene in a timely manner. Discovering in hindsight that profit is disappointing is not management information, but historical record.
2. Do not let costs grow automatically
9. Do not cut blindly
With a growth budget, people are often hired and costs incurred immediately. But if revenue lags behind, those costs continue to accrue. Therefore, work with decision points: at what revenue level do you hire someone, when do you invest, and what do you postpone? Growth may cost money, but incurring costs is not growth.
Good people, strong systems, digitalization, and commercial clout can add value. Do not just ask: “Can this be cheaper?”, but above all: “What does this euro yield?”
10. Work with scenarios
Create three budgets: realistic, disappointing, and positive. What happens in the event of a decline in revenue, margin pressure, or the departure of a major client? Those who think ahead can act faster.
3. Know your fixed and variable costs
Clearly map out which costs fluctuate with revenue and which persist when revenue declines. Personnel, premises, lease contracts, subscriptions, and systems can make a company vulnerable.
The conclusion is simple: profitability arises from realistic budgeting, understanding margins, making costs visible, and adjusting in a timely manner.
4. Look beyond revenue
Revenue means little without margin. A large customer can hardly generate profit through customization, rush orders, storage, correction rounds, or extra logistics. Calculate what a customer, product group, or order actually contributes. Some revenue makes you bigger, while other revenue mainly makes you busier.
Waiting for revenue to rise is not cost management. Just as waiting for someone to ring the doorbell is not a sales strategy.
Whoever gets a grip on their costs now will determine for themselves how much they earn, can invest, and under what conditions they sell.
5. Dare to let go of bad revenue
A customer who generates too little margin and demands many exceptions can cost more than they contribute. Raise prices, adjust terms, standardize, or part ways. A company becomes more valuable through profitable, predictable, and repeatable revenue.
Rob Looye
This column is an abridged version.
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