Just Because You Can…

The more we make the more overhead that comes with it. Some necessary and helpful, most just a result of habits when you start having more. What felt like a crazy spend previously has now become one you don’t bat an eye at. The big office. The hiring. Just because you can doesn’t mean you should. Grow revenue fast and overhead slow. Understand the difference between fixed costs and variable costs. If you view your business or life through the lens of percentages you can aim to keep profit at the same percentage of revenue during rapid growth but all businesses will plateau. What happens to that overhead percentage when you do? I’m sure in reading this you can think of fixed overhead you have currently that aren’t necessary to the success of your business.

Never assume your company is going to always be in rapid growth so plan your overhead and keep it safe to absorb the blows of the unexpected. Rapid growth is cool but sustainability is way cooler. It may feel healthy increasing costs but in doing so you force a floor of revenue or income that now creates the type of pressure that keeps you up at night. The margin of error at that point becomes so slim.

If you have been in growth phase and your overhead has as well, the fixed costs won’t care when your company has a few rough months. They’ll still come to collect.

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