12 common traits of profitable early-stage companies

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12 common traits of profitable early-stage companies

20 Oct 2023

Mari Rydings

Mari Rydings is a versatile content creator, editor and marketer with experience developing dynamic, results-driven materials for B2B and B2C audiences. As the editorial director for Avant Food Media, she leads the day-to-day editorial operations for the company’s print and digital magazines, newsletters and social media platforms. Outside of work, she loves reading, hiking, putting together jigsaw puzzles and spending time with her husband and their twin daughters.

KANSAS CITY, MO — Profitability means different things to different people and different companies. For some, profitability is all about the bottom line. For others, especially early-stage brands, it’s about reducing stress, working fewer hours, achieving financial freedom, and creating a business that can be used to affect change.

A recent live master class organized by EmergeCPG — a company dedicated to shortening the learning curve for early-stage entrepreneurs through access to industry leaders, 1:1 coaching and live monthly classes — featured Keith Kohler, president of K2 Financing, who shared 12 traits that profitable companies have in common.

Kohler’s presentation, Getting To, or Increasing, Profitability, was hosted by Julie Pryor, CEO of EmergeCPG.

“At the end of the day, profitability is your individual journey,” Kohler said. “In my conversations with founders, I’ve been looking at the habits, practices and attitudes that have the best chance to either have made them profitable or have them on a line of sight towards profitability.”

“When thinking about all these traits of profitable companies, I encourage businesses to think about how they can make some of them a habit, practice or goals they are working toward achieving.”
— Keith Kohler | president | K2 Financing

Kohler, a financial advisor who help entrepreneurs on their financial journey, shared 12 traits that profitable companies typically have in common:

A gross margin that is better than their peers
A desire to constantly seek better deals from their suppliers
Efficiency with headcount and/or contractors
Owners who do more and for longer periods of time
A short-, medium- and long-term plan
A financing plan that explores all available options
A finance team that is 100% aligned with and highly engaged with the financial strategy
An owner with line-by-line knowledge of all financial statements
Well-defined key performance indicators and metrics
A well-defined finance rhythm that tracks daily, weekly, monthly, quarterly, semi-annual and annual activities
An ability to quickly eliminate what isn’t working, with no attachment
Resourcefulness and resiliency

“When thinking about all these traits of profitable companies, I encourage businesses to think about how they can make some of them a habit, practice or goals they are working toward achieving,” Kohler said.

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