In small businesses like that, how often do profits actually appear? It seems like big public companies often decide to increase spending to chase growth that would increase revenue and be profit-neutral. Do smaller companies think about it in the same way?
We spend our profits in different ways. Some of it goes to future planning (bigger stock piles, larger cash reserves, growing headcount etc). Technically all our working capital, all our assets, all our stock, has been funded by "retained income".
That said we also pay bonuses (13th check) in profitable years , and we issue dividends to owners. The dividends can be significant. Or 0. Or less than 0 (salary deferred in bad years.)
We want long-term sustainability , but also returns for being owners (otherwise we might as well go get a job somewhere. )
Organic growth is fine, sales going up is good, but we're not looking for hyper growth.
There us no "exit" (for the business) on the cards. An IPO is out of the question, and having seen the destruction caused by corporate acquisitions that's not a route we like either.
It's not glamorous being a small business churning out regular profits. But it pays well.
