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In business, your profits are your reward for your endeavours. In fact, profitability is the only reliable measurement of a business' success. Profits are the very lifeblood of a business. They fuel growth, support the owners, provide for the well being of the staff, and ultimately determine the success or failure of the business. So how can you increase your profits?
The objective is either to expand sales income while controlling direct costs, or reduce direct costs to increase gross profit.
You should ensure that:
Warning - Be wary of dropping prices to boost sales. The increased volume may not be sufficient to cover the reduced gross profit margin
Warning - Before changing your supplier, consider the level of service you are receiving as well as the cost
You should aim to keep costs under your control:
You must be aware of your income and expenditure. Proper books and records are essential for monitoring the trends and patterns in your business.
It is not necessary to produce a full profit and loss account every month, rather select the key factors that will best help you understand how you are doing, e.g. chargeable hours, sales volume, wastage, and materials used. Compare these figures with previous months, and with your targets.
Do call us if you would like further help or advice on this subject.