McDade Roberts outsourced finance director package was launched to help Lancashire businesses who want to step up and take control of their business with the support of an outsourced finance director to help shine a light on what to do next. One of the most common questions our team hears is “How do I increase my profits?” Read on for a quick blog on the topic but if you really want to get the answer, book a free call with us today.
How To Increase Profits
In business, your profits are your reward for your endeavours. In fact, profitability is one of the essential measures of a business' success. Profits are the very lifeblood of a business. They fuel growth, support you as the owner, 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?
4 Ways To Increase Profits
There are four key areas that can help drive profitability.
- Reducing costs
- Increasing turnover
- Increasing productivity
- Increasing efficiency
You can also expand into new market sectors, or develop new products or services. Not sure which to try first? Give us a call.
Gross Profit Matters
The objective is either to expand sales income while controlling direct costs, or reduce direct costs to increase gross profit. Below are a few areas to think about.
- Do you know your market and your competitors?
- Is your product knowledge complete and you are technically able in all aspects of the business?
- Is your service of high quality, delivered on time and according to specification?
- Do you take advantage of cost-effective means to increase sales?
Warning - Be wary of dropping prices to boost sales. The increased volume may not be sufficient to cover the reduced gross profit margin. Remember the saying revenue is vanity, profit is sanity.
- Are your direct costs kept to an absolute minimum? Look carefully at material and labour costs, as well as production methods. Be flexible and innovative in seeking more cost-effective solutions
Warning - Before changing your supplier, consider the level of service you are receiving as well as the cost.
Overheads Matter Too
To enhance your gross profit, you should aim to keep costs under your control:
- Expenses - Keep your business expenses to an absolute minimum, and ensure that any additional overheads you assume result in increased profitability/efficiency
- Increasing your overheads - Are you satisfied that for all new overheads you have reviewed the market to establish where to place your orders? Reliability and backup service are important factors to take into account. The cheapest may not be the best for your business
- Where assets are acquired on finance - Be sure to obtain quotations for your finance from your suppliers, your bank, and a finance company. Check with us to see if your finance costs could be reduced
- Reviews - Many businesses could benefit from a regular review of their costs. Even bank charges can often be reduced and every penny counts.
- Credit - Control your credit account customers closely to avoid bad debts
Need a Guiding Light?
All business owners must be aware of their income and expenditure. Proper books and records are essential for monitoring the trends and patterns in your business but who do you have to read the books?
Our MR Finance Director outsourced package gives business owners the confidence to make decisions based on financial facts. If your objective is to boost profits, give us a call.
The first consultation is free so you have nothing to lose but a potentially substantial profits to gain.