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Why Increasing Your Company Revenue Is NOT EQUAL To More Profits

Have you been increasing your company revenue but still not able to increase your company profit and reduce your debt?

When CEOs and Business owners want to increase profits, usually the first thing that comes to mind is to increase revenue. But they are surprised when they realize that increased revenue does not increase their profits.

A lot of CEOs and Business Owners spend a lot of money and time to make an effort to increase revenue. They think increased revenue is the solution to their problem. They spend so much effort to penetrate the markets, spend money on advertising and promotion. Indeed they increase revenue but so is the loss. Why? What’s wrong?

The truth is increased revenue can increase profits if the company can maintain its control on their cost. But can the company do so?

To give you an example:
One company tries to increase revenue, hoping to increase profits and pay down debt. Revenue from USD115mio, loss of USD115mio and debt of USD443mio, in 6 years Revenue increase to become USD392mio, loss of USD252mio and debt of USD603mio

From the example above increased Revenue can lead to bigger losses. In this case, the company is not better, in fact it’s worse off. The company borrows more money from the banks to finance its increased revenue which requires more working capital, in addition to finance its increasing loss.

Increased revenue alone will not increase your company profit. Many parts of the company play a role. This is like a well running machine or car, a car can run smoothly if all parts of the cars are designed, manufactured and maintained correctly. The car will not run fast if the oil is dirty and old, the battery is running out, and the fuel is leaky.

Increased revenue can increase profits depending on the state of the company’s infrastructure. Has the organization structure, the systems, policy and internal control been designed correctly? Corporate culture plays a big role as well. Increased revenue can increase profits when the company has good organization structure, systems, policy and internal controls. What happens in many cases is that there are many money leaks which have happened in the company for a long time and has been part of the culture. If this is not fixed, increased revenue will not increase profits.

Without proper internal control, the cost is out of control which can lead to the higher the revenue the higher the loss.

CEOs and Business Owners needs to review their whole company’s operation to find out what went wrong and where the problem is. In many cases they may not have the time to do so.

Finding problems on their own time will take them to labyrinth path with trial and error which can be costly, wasting time and resources which the company doesn’t have.

Most company will hire consultants to help them solve this BIG problem. The RIGHT consultant with the RIGHT experience and expertise can help companies find a solution.

The RIGHT consultant will help companies to make the infrastructure more optimized and designed correctly, so when companies increase their revenue, it will lead to higher profit.

But hiring an expensive BIG brand consultants are not always the right thing to do. Because they usually send junior consultant who don’t have proper experience and expertise. Therefore, Hiring the RIGHT consultant is THE KEY!

Why Rantai Breakthrough Consulting?

Rantai Breakthrough Consulting has lots of experiences in helping many CEOs and Business Owners to massively increase company profits.

Our CEOs and founder of Rantai Breakthrough Consulting is a veteran CFO with 20 years of experience helping companies turnaround in many different industries.

Some results like turnaround companies by increasing profits by USD30million in 1 year and increase profits by 3000% in a few years.

How does Rantai Breakthrough Consulting do it?

Our approach is we look and analyze the company as a whole not just piece meal. If we want to achieve positive results at the end, then we need to work and fix from the front end of the company.

We implement the HRS system, founded by Ronawati Wongso, CEO and founder of Rantai Breakthrough Consulting.

With HRS system, we take helicopter view of the company to find the root cause problems and provide the right solution to optimize the company profits.

We go deep to find the root cause problems and give long term solution, not just surface level solutions. You can reap the benefit years to come and the profits increase massively as quickly as 6-12 months period.

In summary, in order for increased revenue to achieve increased profits, CEOs and Business Owners need to streamline their systems and policy and internal control so that the infrastructure is synchronized to support the increased revenue.

All parts of the company is like a well running engine, work smoothly to make the car run fast. If the front part, the organization structure, systems and policy and internal control, is right, the end part will generate great results.