Front of house operations, often the ‘sales engine’ of a business, are generally thought of as the more glamorous side of a company.This is understandable they is, by definition, the public facing side of a business. Perhaps due to the glamour, or may be because they are the sales generators, these front office activities are often the first recipient of business investment.
Often forgotten, are the back office functions of a business. Not as glamourous, but arguably the place where profit is made or lost.
There are no definitive definitions of ‘front office systems’ or ‘back office systems’. However, I think most would agree that the front office deals with the customers of the business, whilst the back office deals with everything else. It follows, therefore, that, in the main, the front office generates sales (turnover), whilst the back office manages the delivery of the sales.
So then, the investment in the front office should generate more turnover, and investment in the back office should lower costs and, therefore, generate more profit.
Both are important, and neither can exist without the other. But don’t let the glamour of the front office divert your attention from the back office.
This post was first published at www.therealinternetcompany.co.uk/business-systems/turnover-is-vanity-profit-is-sanity under the title “Turnover is Vanity, Profit is Sanity”