Mary-Jane Kingsland

Turnover, sales, revenue, fees – whatever you call the top line, are vanity and not a true indicator of fiscal success. How many times have you heard business owners and those that manage, quote the top line when asked to define the revenue generated by their company?

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In truth, the true definition sets ego aside and offers up the bottom line; the residual income after all expenses and losses have been subtracted. In other words the profit.

If you are in a position to indulge your ego and pursue your passion without the need to put money in the bank, great !

If not, take note that Tesco, the world’s third biggest retailer, has recently bared it’s bottom line ... and on the back of it, issued its first profit warning in living memory.

Hitherto, Tesco enjoyed one of corporate Britain’s most consistent growth stories, but now it lags behind its competitors. It’s well worth taking the time to understand why.

Here’s a quick synopsis: Tesco account for about one in every £10 spent in British shops and makes more than 70pc of trading profit in its home market – via the British consumer; or to put it another way – you and me.

Unfortunately a lot of us are currently suffering from over stretched incomes and a rise in living costs, while we also try to weather the government’s austerity measures.

As a result we have changed our spending habits.

Tesco’s CEO, Phil Clarke, attributed the drop in profits to having driven productivity too hard: “We’ve run too hot for too long.”

Commentators support the view that Tesco’s fall from grace was caused by the groups’ dependence upon revenue from non-food items, such as clothing and electrical items – whereas their rivals, reporting small increases in profit over the same period, concentrated to a greater degree on food; something consumers (literally) cannot do without.

In other words, Phil Clarke should have said: “We haven’t really taken into account what our customer needs are and what they can afford – we’ve become a bit caught up in what we wanted to sell to them.”

Something to think about.

Tesco’s proposed solution is to invest in staff, offer better products and concentrate on their price-cutting campaign, launched last September.

Could your business benefit from a similar review of what your customer needs? Are you maximising your market potential or just massaging your ego?

One salient fact to bear in mind is that the market place survives and in some instances thrives, whether you are a part of it or not.

Since man developed a need for anything – and found something he could trade to get it, markets and their idiosyncrasies have played a crucial role in our society.

The key to finding profit in the market, is to first find out what your clients and customers want – and then make sure that you are delivering it.

The way you go about it is your choice, but your success or failure will be reflected in your bottom line this time next year.

Mary-Jane Kingsland is a business coach