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Improve Business Profits

You need to improve your profits. You are not alone.

 

Increasing your business profits isn’t as easy, or hard, as you may think. Here are 4 hints and tips to help you along your way.

Profit increase strategies

 

Your Turnover

This one is straightforward enough – concentrate on your best performing product/ service lines of revenue and your best, most profitable customers. It doesn’t make sense to spend 10 hours on a customer each month that spends £1k-£2k per month opposed to 0.5 hours on a customer that spends £15k with you each month.

 

Increase business turnover

Your Costs

Reduce all non-revenue making overheads to a minimum. If that means reducing your workforces hours in slack times, do it. It is better for them to have less money each month than to have the company go bust. Don’t pay yourself a huge wage. The company is more important than your 4 holidays per year.

Write a business plan for profits

 

Prepare a Business Plan

You should always have a business plan. It is your target to achieve. If you do not have a business plan, how do you know where you want to be in 6, 12 or 18 months? Write one now.

 

KPI’s – Key Performance Indicators

Benchmark everything of importance; Sales figures, staff productivity, revenue, profits. Then look outside of your business and benchmark similar businesses. How are they doing? If they are doing well, how can you replicate their success?

1 dash 1 helps businesses reach their full potential by assisting them with growth strategies. We know businesses and how to make them more successful.

Improving efficiency is key to any business especially in tough financial times. Good business managers recognise this; Great business managers address efficiency and make it happen!

Efficiency, productivity and the competition are linked. Improved productivity equals increased efficiency which results in a higher level of competitiveness.

Efficiency and productivity

Efficiency is about using resources to their maximum potential. Efficient companies maximise outputs from given inputs, and so minimise their costs. By addressing efficiency a business can reduce its costs and improve its competitiveness & productivity.

There is a huge difference between production and productivity.

Production is the amount made by a company in a given time frame.

Productivity measures how much each employee makes over a period of time. It is calculated by dividing the total output by the number of workers. If a manufacturing firm employs 50 staff that produces 1000 toys a day, then the productivity of each worker is:

1,000 toys/50 staff = 20 toys

Chart displaying efficiency and productivity

An increase in productivity from 20 toys to 25 toys, without increasing costs, means the company has improved it’s efficiency. The result is lower unit costs and increased profit margins.

Staff productivity depends on their skills, the quality of machines available and management effectiveness. Productivity can be improved through traininginvestment in equipment/ machines and better staff managementTraining and investment cost money in the short term, but can raise long-term productivity.