“Profit is the very lifeblood of any business endeavour”
Dr Jason Wouhra OBE, CEO of Lioncroft Wholesale, shares his thoughts on the vital importance of profit
Seeing the E2E Profit 100 list announced is both inspiration and uplifting. As businesses navigate one of the most challenging trading periods in recent years, it is absolutely right and proper that we celebrate those businesses that have delivered profits despite the less-than-ideal economic conditions.
When it comes to running a business, generating a profit is essential. Profit is the very lifeblood of any business endeavour, and survival without it is near impossible. Profit, after all, is far from a simple maths equation, comparing monies in and monies out. Actually, it is also a state of mind.
Profit brings with it courage. Bravery to take a risk, to get creative, to innovate and evolve. When there is no profit, there is no investment and without investment, businesses are vulnerable and unable to move with the times and adapt to ever-changing demands. Put simply, without profit, you’re on borrowed time.
The challenge
The past few years have thrown everything up in the air. While we may be weary of churning out the same oft-repeated narrative about the impact of the pandemic, the fact remains that for many, their business was changed dramatically, never to be the same again.
In addition to the global impact of the Covid-19 pandemic, the UK economy was also hit by the economic upheaval caused by Brexit – much of which continues today. In fact, London’s economy was said to have shrunk by £20bn alone in the four years since Brexit and the average Briton was £2,000 worse off last year*. Then, throw in the staggering increases in the cost to live and the cost to do business, and it’s easy to easy why profit has become harder to achieve and ever-more important to chase.
And now, we have more costs coming down the line. The announcement in the recent Budget that the National Living Wage will increase once again revealed that while the government may have been bullish ahead of the election, their approach to UK business is far from favourable.
No one will argue about the importance of paying a fair wage, but at the risk that it means less people will be employed as the cost to businesses is simply too high? No. Surely there is a better way?
Without profits, how will entrepreneurs reinvest in their business. How will they grow, evolve, advance? How can we, as a nation, compete on the global stage? In the UK, we have a rich and varied history of innovation and creativity. We have a long-standing history of creating powerful IP in all manners of industry from engineering to technology and aerospace. We have long been world leaders, yet without investment and a clear impetus to improve, driven by the right conditions, it is inevitable that we will fall behind other nations.
We must create the right environment to encourage investment and growth. We must think differently. It has never been more important to prioritise profit because with that comes competition and a desire to win. Those included in the E2E 100 Profit have embraced this with gusto, daring to be different and finding the courage to take a risk, fully committed to the pursuit of the reward.
Now is the time to do things differently. For the sake of business, for the sake of entrepreneurialism and for the sake of the country.
Source: London.gov.uk, 2024