Profit Tips

 

Profit is all about knowing your numbers. It starts with knowing your OVERALL PROFITABILITY, your GROSS MARGIN and your OVERHEADS. It’s about knowing if each product or service is really making you money and reviewing your overall business performance on a regular basis and understanding what all those financial reports actually mean. It’s like having a dashboard in your car and knowing what each gauge means and what it does, so that you have a better journey.

Your OVERALL PROFITABILITY is about understanding all the financial parts in your business that lead to making it profitable. It’s knowing what the reports are telling you and how the reports fit together so that you are making sure your business is making all the profit it can. The more profit you make the easier it is to run and grow the business.

GROSS MARGIN is an important concept to understand. It is the difference between your material and selling costs and what is left over to operate your business. While the gross margin for every business is different, the role of the gross margin is the same … it’s job is to cover the overheads and still have a surplus afterwards which then makes up your net profit.

Your OVERHEADS are your general running costs for your business. Another terminology for them is “fixed costs”, the costs that are there regardless of how many sales you are making. Such things as rent, insurance, phone bills, certain people’s wages, and so on. As the owner of the business, you will need to have a handle on these costs, manage them and know exactly how many sales you need annually, monthly, weekly and daily to cover these costs and still make profits.

To run a successful small business you’ll need to ensure that your business runs at a profit.  That way you will make much more money for all the hard work you are putting in.

Check out the tips below on how you can improve the profits in your business

 

  • How to Increase Profit in Your Business

        Would you like to make more profit in your business? Often, when you are thinking about improving profit, you think of generating more sales and income. Have you considered the other side of the equation – your expenses? The best part about this is if you can save…

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  • Are You Working Hard and Going Broke?

      Are you putting lots of time, energy and effort into your business but not moving ahead financially? Then you could be working hard and going broke. The sad thing is that this story is all too familiar for small businesses especially in the first five years.  Many just try…

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  • The Easiest Way to Make More Profit

    Would you like to make more profit in your business? Too often when business owners want to make more profit they think ‘I need to grow my sales’.  While that’s true to a point, one of the easiest places you can increase your profitability is to take a look at…

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  • The Importance of Knowing Your Numbers in Your Business

    So are your numbers up to date? It is essential to know your numbers so that you can maintain focus and have visibility on what is going on in your business. Read more to find out how important they are in determining success of your business.

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  • How To Get Your Pricing Right

        Have you ever been stuck in a situation where you are unsure of whether your pricing is too high or too low? It can be very tricky to get your pricing right because there are a number of variables for you to consider. This includes your competitors, your…

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  • How Many Sales Do You Need To Make The Profit You Want?

        A question we often get asked is how many sales do I need to make to make the profit I desire? So what is that magic number for you? Most business owners are wishy-washy with their sales numbers and will either just take whatever that comes their way…

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  • Is Your Business Losing Profit?

      When owning your own small business it’s in your own best interest to make sure you are making a profit. To be successful in the long-term your business needs to be able to sustain enough money to cover running costs plus extra insuring that you are maintaining a beneficial…

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  • Look at Your Break-Even Point Differently to Make More Profit

      As a business owner, calculating your break-even point is an important number for you to know.  So what is the break-even point? Break-even is when your profit is zero, you’re not making money and you’re not losing money. Knowing your break-even point can be helpful in deciding prices, setting…

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