A Different Way To Look At Profit

What does it mean to be profitable as a craft brewery or food crafter? Your tax return will probably tell you that profit is your cash receipts from sales less cash expenses, whether those cash flows cover months in the past or future (ie real estate taxes or insurance). Some people will tell you that this is an OK way to view your business.  

But it isn’t. Your tax return is meant to tell you your tax liability. And simply accounting for profit from cash inflows and cash outflows is only meant to tell you cash flow from operations.

But there’s another way…

Strategic Costs in Breweries and Food Craft Businesses

All the costs and expenses in a brewery or food craft business have value. These expenses and costs ultimately contribute to your revenue and without them your revenue may not be what it is now. This is why it is so important to view costs as strategic rather than things to reduce. The trap you can find yourself in when you go the route of cutting costs, rather than being strategic, is that your quality can suffer enough to run your customers away. Clearly that is bad for any brewery or food crafter.