Generating money from your business, everyone has different ways to look at it, or have different ideas in mind or targets.
How the angles differ?
We look at some business and see that they have good volume of sales and we tend to assume they are doing good, right?
Or we look at someone with good set up, stable manpower we assume they are doing good, right?
But is it fact every time? Especially with financial aspect the real picture always differ from what looks “going good”.
But what matters the most is what is the goal, target or thought behind the Business, i.e. “Perspective” behind it matters most.
Why so?
So, for a person who wants to grow their business in terms of scale, will never look at the short-term losses because they know this all will be covered once they achieve scale, from outside it might look a loss-making entity, but the real perspective is reach a certain scale first.
Or, for a person who wants to generate short term cash, will always focus on cost cutting, margins because that will hamper their cash generation, this might look a struggling and stagnant entity but real perspective is making fast profits, in which they are successful.
Similarly, if in your business you are able to finalise the goal target then decide the perspective to look at the money in your business, this will help you to stay focused and map your success in proper parameters and not stereotype parameters, which will make you feel lost.
For eg: lets talk about one element, Sales
Now how sales can look at
| Perspective | Parameter to be looked at |
| Short term Profit | Margin in Sales, and credit period given |
| Higher Volume of Profit | Reach of Sales geographically, new client addition, repetition of client billing, Increase in Sales Volume |
| Product Level Expertise | The bifurcation of Sales Product wise, Sales volume and margin Product wise |
| Distribution Business Expansion through Set Channel | Sales and Sales Return, Product level analysis of Sales return, Client Repetition along with Volume of Sales |
| Manufacturer with Aim to Establish Foot hold in Market | Fast moving Product in Sale, Unsold Inventory item, Geographical area wise Sales Volume Growth, Area wise Inventory Sold Unsold chart |
Many such angle and permutation combination are there to look at each element of business, Hence your perspective is the first thing that matters, which will help you understand the parameter you need to keep your eye on.