An employee at a business I do some work with was complaining to me the other day that his boss didn’t know what he was doing and that the company wasn’t profitable.
The problem was (besides the fact this employee should keep his mouth shut) is the owner of the company isn’t worried about profits. He is more concerned about growth and building up equity.
While the company isn’t cash flow positive it is able to cover all expenses and the reason it’s not cash flow positive is all excess revenue goes into the purchase of more assets.
If his business were being judged on profitability then it could be considered a failure. However, since his sole objective is to grow the company (and he is able to afford to do that) then he is successful.
The problem wasn’t the numbers, the problem was not knowing the business plan.
Have a great day!