PROFIT DRIVERS

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Are you using all of these 8 Profit Drivers?

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Profit driver 1 – Price

Price will always have an impact that is two or three times greater than any of the other drivers. The reason for this is quite straightforward: an increase in price has the greatest impact because every additional £ goes straight to profit.

Classic mistakes to avoid

Many business people find it challenging to increase the price of their products or services & usually adopt the view that price is something over which they have very little control because of competitive pressure (classic mistake #1). They also believe that reducing costs is the most effective way to building a profitable business (classic mistake #2).

Here is the bottom line: far and away the most effective strategy for maximizing your company’s profit is to aggressively price your products or services, elect to deal only with those customers who see the value that you deliver to them, and not allow price-sensitive customers or competitors dictate your company’s pricing strategy across the board. At the end of the day, profitability is the only measure of success. Revenue does not pay the bills or give you the resources you need to grow- that comes from profit.

If you need help with pricing your products/services profitably, get in touch with us by Clicking here or filling out the contact form at the right hand side of this page

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Profit Driver 2: Your Team

In business, people are your greatest resource. You can have the right product, priced perfectly and on demand but if you don’t have the right people to help you serve your clients exceptionally well, you will be undermining a lot of your profits.

One of the critical areas of your business as you grow is getting the right people on board with you, people who share your grand vision and who can support you well in moving it forward.

We have connections and can help you source for the ideal people for your business as part of your team.

Should you need help in this area, just get in touch by clicking here

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Profit driver 3: Business systems

This is by far the most overlooked aspect of running a successful business and hence makes making profits in your business very challenging too.

Business systems start with documented procedures and processes that allow your business to run without you. This is often referred to as an operations manual and it’s purpose is to capture the collective “know how” of your business.

Let me ask you a question. If you went overseas for six months or just for a holiday leaving your business behind, when you came back would it be in better or worse shape than you left it? Would you even have a business left?

Many small businesses, especially when they are sole operators or where all the partners work in the business, don’t have business systems in place.

They often find themselves in a catch 22 situation. They have no time to work on the business because they are too busy working in the business. And they can’t get away from the business because they haven’t developed documented systems and processes.

So they’re stuck in a business that has become a self made prison.

Do you feel like that?

Weel, the only way out is to make time to create and document these business systems and we can help you with that.

We can help you  start this process and go through some of the practical steps of creating documented business systems that will help get more freedom from running your business and more profits too. Click here to get in touch

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Profit driver 4: Costs

Failure to control and manage your costs will result in low profits or no profits at all and most likely – losses. You don’t want that, do you? No.

Costs are necessary for you to run your business, the issue here is not  costs in and of themselves but which costs & how you manage and control them.

It is estimated that most companies are wasting about 30% of their expenditures on items that do not have any impact upon their customers.

But there’s no such thing as a quick save, in good business. Though knee-jerk cost-cutting may make the figures look better in the short term, it can have a negative medium or long-term impact on your business and profitability.

For example, reducing customer service costs may reduce your capacity to do business. Furthermore, the costs that can be reduced most easily are usually those of a “discretionary” nature, and these tend to be the ones geared toward building the future of your business (marketing, team training, R&D, etc.).

Real lasting profitability & cost savings for your business won’t come in the way of cutting out this expense or that expense. To see lasting results, we can show you steps for managing your business’s expenses in a way that will guarantee your profitability and sustained growth.

Click here to get in touch today

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Profit driver 5: Credit Control

If you sell your products and services on credit i.e – you receive payment later from your customers, your cash flow could potentially be affected.

One issue that many business owners fall victim to at some point is cash flow problems. Cash is the lifeblood of a successful business. Without cash, any business will struggle, suffer, and eventually die. Because of the type of business they operate seasonal business owners need to be even more vigilant when it comes to who they sell on credit to and how the collection of the outstanding amounts take place.

Are you waiting too long to be paid?

Through our credit control service we devote our time and attention to contacting your customers before the invoice is due and maintaining a frequent dialogue, using our experience to ensure timely collections whilst preserving your customer relations.

Our approach is highly effective at resolving any disputes and maximising the recovery of outstanding debts. Throughout the process, we’ll transfer our skills and knowledge to aid you in maintaining healthy cash flow and profitability.

We can help you implement and run this profit driver in your business. Get in touch here

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Profit driver 6: Hard & smart work

Shear hard work even if you are alone in your business can bring you some profits. “Hard work pays” so goes the famous saying, but even better smart hard work will pay more – that is our opinion here at Sterling Libs & Co and it works.

Anyway, there is no substitute for smart hard work, you’ve got to do it if you are serious about profits. You need to be focussed, determined, innovative, persistent, resolute and resolved to succeed and make profits – it is hard & smart work all the way.

We can’t help you with this profit driver – this is squarely yours to persue, we can however be there to encourage and cheer you up along the way. You can count on us as your partner in progress. Just get in touch here should you need help and support along the way. Here

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Profit driver 7 – Tax planning

Taxes are a fact of life. They affect every business & entrepreneurs.

If taxes are left unchecked, they could consume an ever increasing amount of one’s livelihood.

Effective tax planning can result in hundreds or even thousands of pounds of tax savings each year for you and your business – this is good cash flow that you can use to grow your business and make it more profitable.

At its core, tax planning is the process of organising your finances in such a way to take advantage of the many rules that allow you to maximise the amount of income you keep each year or defer into the future. While the process is essentially the same for any taxpayer, it may entail different types of tax strategies depending on your particular financial situation. Strategies for deferring or splitting income, deferring or maximising retirement contributions, capital gains or losses, property ownership, charitable giving are applied differently in each situation, so they must be developed specific to your needs.

Tax planning and tax strategies involve the application of the rules and provisions of the Income Tax Act, which is voluminous and in a constant state of change.

Our  tax professionals have experience in UK tax system and can help you with income and investment planning strategies for minimising personal & corporate income taxes.

Should you need help in tax planning, get in touch by clicking here

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Profit driver 8 – Financial reporting

Knowing how to work with the numbers in a company’s financial statements is an essential skill for understanding how to grow your business and make it more profitable.

The meaningful interpretation and analysis of balance sheets, income statements and cash flow statements can help you understand the underlying core aspects of the things that are making your business work well and those that are money wasters. However, the diversity of financial reporting requires that you first become familiar with certain general financial statement characteristics before focusing on individual corporate financials.

At Sterling Libs & Co, we’ll show you what the financial statements have to offer and how to use them to your advantage in growing your business and making profits.

Get in touch with us by Clicking Here

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