At Ross Boyd Limited (RBL) we work closely with clients to understand their results and help them improve their profitability.
So how do I make more money from my business? We believe the answer needs to be derived from four areas. One of these areas is ‘enterprise value’, i.e. improving the businesses value, not just its wealth generation. The three other layered areas of earnings generation are: sales; gross profit; and net profit. All are interlinked. Sales is a volume/ price based metric. Gross profit is associated with margin and basically operational efficiency, while net profit features overheads, tax costs, financing and asset efficiencies.
If your business can manage to increase sales by just 2%, while also reducing overhead costs by 2% and increasing operating margin by 2%, overall profitability will increase by some 38%! This means a business with turnover of £2,000k, cost of sales of £1,000k and overheads of £800k would increase profits from £200k to
This simple example demonstrates the big impact that small changes can have on profitability. If you want to understand the numbers for your own business please contact RBL.
In service businesses ideas for profit, improvement needs initiation and management. www.leap.co.uk and www.xero.com are just two of the great products that we use in RBL to assist increase clients’ performance in the following areas:
1. Tracking financial performance easily on a timely basis;
2. Developing centralised records without paper;
3. Working smarter not harder;
4. Improving timekeeping;
5. Improving billing and WIP management; and
6. Winning and targeting profitable new business.
Many firms have been slow to adopt and come to terms with the latest technology. This presents an opportunity to get ahead of the pack and improve your business results. Feel free to contact Ross Boyd if you wish to discuss any aspect of this article at: email@example.com