There are Many Formulas for Running a Lean, Profitable Business

I just read a pretty good piece about running a profitable, lean business. It reminded me a lot of how Justin approaches the lean P&L.

The article, written by the CEO of Powerbox, offers wise perspective. If you are running for profit, you should read it. His approach to a lean organization is having a remote workforce, so no expensive headquarters. Hiring when you need to, not ahead of the need. And a focus on building a product that sells itself, so there’s no expensive sales team.

I love it! Yes to all three of these ideas.

I am pretty passionate about hiring when you actually really need to, rather than ahead of the need. This is so important for a bootstrapped company especially. My philosophy is usually to get to the point of organizational strain, or just beyond it even, and then hire. The discomfort of this isn’t for everyone, but it does help keep the lights on.

Every lean organization is different. In my last company, we did have an office. Actually, not just one, but two offices, even though the staff did a ton of remote work. It was important for us culturally to have a communal gathering place. I would not have changed this even though rent was a big monthly recurring cost and would have saved us a ton of money. But, an office isn’t what is important for everyone.

We also had a good size sales team. Because we sold to the enterprise, with a set-up/integration process, our product necessitated a sales team. But, not every product needs a large sales team.

Whether you are bootstrapped or have investors, if you are running for profitability the lens by which you make financial decisions is different than if you aren’t. It’s not just “Can we afford it?”, but “Should we spend? Why is this important? What will be the potential impact? Will this help us reach our goals?”

This answers are unique for each company. There is no one right formula to run a lean, profitable company. Every team, every product, every market is different. It’s the spirit of running profitably that’s the same no matter what size or shape the company is. So the formula is really pretty simple:

Don’t spend money you don’t have. Do spend money (when you have it) on things that will help you meet your goals.

I hate to over simplify it, but that’s really the nuts and bolts of it.

Podcast: Embed

Subscribe: Apple Podcasts | RSS