16 Biz Experts Detail How To Prioritize Growth Or Profit Successfully

Running a business involves founders making a number of decisions that have foreseen and unforeseen consequences. For example, if a leader chooses to focus on growth, the business potentially becomes a bigger market player without the stability of a solid financial foundation. On the other hand, if they choose to prioritize profits, they gain financial stability at the risk of losing sight of other factors that matter just as much.

Whether a leader chooses to prioritize growth, profits or a mix of both, it’s important to consider the bigger picture and other factors at play on an internal and external level.

As experts, the members of Forbes Business Council have experience navigating the challenges that come with expanding a business. Below, 16 of them discuss the merits of a company focusing first on either growth or profits and how that decision can impact a business's potential for success.

1. Examine The Whole Picture

Focusing on growth or profits first depends on various factors, including business goals and industry and market opportunities. A tech startup looking to fundraise should focus on growth by building a roster of customers and having operational discipline. An enterprise could focus on profits to ensure long-term financial stability, boost competitive advantage and meet stakeholder expectations. Profits can then be reinvested to fuel growth and innovation. - Parna Sarkar-Basu, Brand and Buzz Consulting, LLC.

2. Take A Balanced Approach

Going for a balanced approach where growth and profit are given equal importance would be the safest option. Capturing market share without having to sacrifice financial stability will give firms the platform they need to pursue further innovation. By solidifying their competitive advantage this way, businesses can drive sustainable growth. - Sabeer Nelliparamban, Tyler Petroleum Inc / ZilBank

3. Build A Solid Foundation

Focusing on growth first helps build a strong foundation while managing costs carefully. Prioritizing profits too early might limit future potential. Growth should align with the number of deals you secure. Investing in a solid structure is essential to delivering quality service and building a strong reputation, all while keeping an eye on market conditions to ensure profitability. - Raquel Gomes, Stafi

4. Focus On Establishing Your Brand

Companies should focus on growth first. Early growth builds market presence, a solid customer base and brand recognition, which can lead to sustainable profits later. While initial profitability might be lower, prioritizing growth sets the foundation for long-term success by expanding market share and achieving economies of scale. - Andrei Neacsu, HyperSense Software Inc.

5. Iron Out Systems And Processes

I’d recommend focusing on profit first. It’s much harder to iron out systems and processes at a large scale. If you can figure out how to turn a profit–even if it’s a small one–when you’re still a lean team with only a few products or services available, it will be much easier to duplicate that success efficiently and without issues. Growth can come after. - Emily Reynolds Bergh, R Public Relations Firm

6. Determine Your Growth Trajectory

The choice may vary from company to company, but a company that is growing has more options and opportunities to drive scaling, thereby creating profit, value and advantages in the market. Not all markets or companies will have the growth trajectory to make that happen. In those cases, deriving value through operational excellence and profit is best. - Nicole Faucher, Clearway Health

7. Consider Your Financial Resources

It depends on the financing model. Bootstrapped businesses need to make sound asset management decisions from day one. They inherently understand the value of great business fundamentals and the relationship between customer acquisition cost and customer lifetime value. Companies backed by venture capital or private equality can grow the brand and economies of scale quickly, but must ensure a profitable business model. - Mark Emond, Demand Spring

8. Keep Your Budget And Stakeholders In Mind

I recommend focusing on profits first for two reasons. First, it can allow an entrepreneur to build a growth strategy they can afford. Consider the ownership structure of the company and financing covenants to understand risk tolerance. Then, remember that shareholders ultimately dictate the goals. Companies built on top-line growth with less regard for profit have become more scrutinized by investors today. - Noel Asmar, Noel Asmar Group of Companies

9. Consider Your Goals And The Market

Companies must consider their unique circumstances, market conditions and long-term vision. Prioritizing growth can build market share, brand recognition and customer loyalty, attracting substantial investment but putting a strain on resources and profitability in the short term. Focusing on profits first ensures financial stability and sustainability, leading to lean operations and sufficiency. - Michael Shribman, APS Global Partners Inc.

10. Look At Acquisition Costs

Companies should be looking at the cost of acquisition. This is something that is sometimes looked at too late and then drastic changes need to be made. Just bringing in revenue does not always translate to bottom-line profits. The cost of labor is rising and more sales result in a flat line on income unless you are careful and look at the big picture. - Allen Kopelman, Nationwide Payment Systems Inc.

11. Expand Your Audience

Companies should focus on growth first, not just profits. Getting more customers and becoming popular is more important initially. While profits are important, emphasizing growth early builds a strong customer base. Following a balanced approach of reasonable growth and profits gives businesses the best chance of long-term success. Excessive growth without financial discipline can lead to failure. - Vikrant Shaurya, Authors On Mission

12. Review Foundational Goals

A growth or profit focus is highly dependent on the founder’s goals. For a venture-backed business, growth should be prioritized. A bootstrapped business needs profits to fuel its growth, which means a shift in priorities. The biggest mistake first-time founders make is not understanding this early on. As a founder who has been on both sides, I find this understanding critical during the early days as it influences all actions. - Ioana Dragomir, AnaApp

13. Focus On Sustainability

Companies that prioritize growth indirectly increase profitability. Rapid but sustainable growth can help capture market share, attract investment and establish a strong brand presence. This approach enhances an organization’s potential for success by positioning it as a leader in its industry, ready to leverage future opportunities. - Howard Makler, Innovation Refunds

14. Prioritize Profits And Growth

Companies should focus on both, prioritizing profits in the short term and growth in the long term. Profits are very important, as this is what supports growth. Without profits, companies won't be able to grow, so focusing on profits first is essential for long-term success. - Pavel Stepanov, Virtudesk

15. Combine Growth And Profit To Expand Operations

Brands should concentrate on the expansion of operations first. Growth builds market presence, customer acquisition and finance attraction. It also lays the foundation for future growth and profitability by creating a brand and increasing outlets. Still, without a clear strategy, success is not guaranteed. Strategic management is all about combining growth and profit-based strategies for success. - Chris Kille, EO Staff

16. Consider The Future

While both are important, companies should initially prioritize growth. Early growth attracts investment, expands market share and builds brand recognition, creating a foundation for long-term profitability. Focusing solely on profits too early can stifle innovation and limit potential. However, sustainable growth requires a path towards profitability to ensure long-term viability. - Shahrukh Zahir, Right Fit Advisors

‍