What constitutes a success for our company, profit wise, is fairly straight forward. For me there are a few metrics that need to be measured in order to determine what is truly a success.
Revenue : Is my revenue growth in this sector exceeding the overall market? If yes, then I am gaining market share. If no, then Im losing. If flat, then I better hope Im in a market that is expanding rapidly .
Gross Margin : For AccuCode, we need at least a 30% gross margin on a given product area in order to consistently deliver profits. If we are not receiving that from a particular product offering, then we need to reallocate those resources to a more profitable area.
Net Profit: I know I need at least 10% net profit before taxes or Im better off putting my money elsewhere. The exception to this rule is when you know that a particular offering is indirectly driving profitability in other areas. For AccuCode, that area is hardware sales. It no longer meets our definition of success; however, as an activity, it creates new customer contacts and opportunities for other products and services.