Business Head's dilemma: Profit or Growth ?

One of the dilemmas some of the small, emerging CEOs have is whether to focus more on profitability or looking for growth opportunities and scale up the business sales turnover.

The reason behind the dilemma is when the organization is small, most of the activities are directly monitored, executed by the business head and he/ she has direct control over profitability. They use to enjoy comfort. At the same time, there is an aspiration to grow big and also the fear of maintaining the same level of profitability and comfort. Because maintaining healthy profitability within a controlled environment is different from maintaining the same profitability when the organization is exposed to different customers, product lines, markets during the growth phase.

In my view, the business head should aspire and balance both profitability and growth for both short term survival and long term sustainability of the business.

Profitability is a measure of your efficiency, effectiveness and the excess cash will give a strength to take the organization to the next level. Whereas Growth, even though it seems to change management in the initial time, is required to generate more cash reserve for sustaining the business. when you ensure the higher or same comfortable profitability in a growth stage, that will help you to grow further into a new orbit. That is cycle and that is the nature of personal and business growth.

Hence both profitability and growth is required. There is no guarantee that the existing comfort or profitability is sustainable if the business is not exploring growth options.