Why Profit Matters
There is sometimes a view that profit is a dirty word and in some circles the idea of a company that is very profitable is looked down on
However, the most profitable companies are usually the ones which contribute most to the economy in terms of taxes and investment – a fact often over looked the public.
So, in search of further information on the UK’s most profitable companies, here’s what I’ve found:
1. Many of them are software and fintech companies – and some of them aren’t very old either! Fintech companies are often ones which have resolved various online problems with financial transactions. If you think about that, it makes a lot of sense. All banks have similar issues with everything from security to knowing where and to whom money is being sent. Wise – a fintech company resolved banking problems around international payments and ensured that payments could be sent and received without delay. Revolut is a similar company that has 16 million global customers and even facilitates overseas currency transactions and cryptocurrency.
2. Building a great platform upon which to do business is also very profitable. Platforms such as Edume help employers train employees on line. Doctify allows people to connect to medical care and the best clinics and hospitals. It is true to say that some platforms have revolutionised education and online shopping.
3. Build a new customer experience. There are a couple of stand out companies here that offer this. Namely Brewdog and Improbable World. Brewdog has built its pubs around fun and entertainment, with different beer flavours, beer for dogs and a hipster vibe, making them really welcoming places for people to meet together and enjoy each other’s company. Improbable World is a software and gaming company that has created enhanced experiences for users which makes the online World feel real.
4. Solve new problems. Leading up here is a major UK success story called Darktrace. This cyber security firm uses AI to detect threats, fraud, and cyber-attacks. In an increasingly online world, Darktrace is putting a stop to hacking and to computers being misused by bad actors. Cazoo on the other hand allows people to buy and sell cars online – a service that came into its own during the pandemic. However, my all-time favourite in this category is Inmarsat a communications company that provides data and telephone services to a wide range of companies and Governments globally. Inmarsat grew out of servicing the maritime industry and allowing this important part of the economy to connect digitally, so that all shipping could be monitored and tracked. This then expanded to other forms of transport. However, Inmarsat shot to fame in 2014 when they tracked signals from Malaysia Airlines flight 370 which disappeared from radar coverage shortly after take-off. Within a short space of time, Inmarsat gave officials location accurate data which had automatically pinged from the Rolls Royce engines, when every other type of communication had been switched off.
Interestingly, all these companies have one thing in common. They’ve been built on vast amounts of intellectual property. And the interesting thing about that is that the statistics show:
Research into businesses with registered IP suggests that they typically grow 60% faster.
In the UK, IPO research has also indicated that businesses that have IP have 40% less propensity to default on loans.
And if they do, from the lender’s point of view, it’s been found that there’s 50% less loss.
Creating IP is also the best way there is to be part of the future. As Abraham Lincoln famously said the best way to predict the future is to create it. It’s also the way to make most profit and future proof your business.
My mission is to help businesses create maximum value from their intangible assets. I can be contacted on:
Tel: +44 113 237 9900