There is no easy answer to this question as it depends on the specific situation of the business in question. However, in general, it is usually better to focus on increasing revenue rather than profit.
The reason for this is that revenue is the top line number on the income statement, while profit is the bottom line number. This means that revenue includes all of the expenses incurred to generate that income, while profit is what is left over after those expenses are deducted. Therefore, all other things being equal, it is better to have a higher revenue number than a higher profit number.
Of course, there are situations where a business might be better off focusing on increasing profit rather than revenue. For example, if a business is barely profitable or barely breaking even, then it might make more sense to focus on increasing profit rather than revenue. However, in general, businesses should focus on increasing revenue.
There are a few reasons for this. First, it is usually easier to increase revenue than profit. This is because there are many more levers that a business can pull to increase revenue than to increase profit. For example, a business can increase prices, sell more products, or find new customers to increase revenue. In contrast, a business can only decrease costs or increase prices to increase profit.
Second, increasing revenue usually leads to increasing profit over time. This is because as a business increases revenue, it also usually decreases its costs as a business becomes more efficient. Therefore, even though the business might not see an immediate increase in profit, it is likely that profit will increase over time as revenue increases.
Lastly, businesses usually need to reinvest some of their profits back into the business in order to grow. This means that even if a business is profitable, it might not be generating as much profit as it could if it reinvested more of its profits back into the business. Therefore, by focusing on increasing revenue, a business can usually increase its profit in the long run.
To sum up, businesses should usually focus on increasing revenue rather than profit. However, there are some situations where it might make more sense to focus on increasing profit. It really depends on the specific situation of the business.
