The Basics: Maximising Your Profit

Overview
Maximising business profits is both an objective for strategic reasons, such as preparing a business for sale, and as an end in itself. The key to successful Profit Improvement is building a business that maximises profits systematically, rather than looking only for short-term gains.

1. Cost Reduction
Cutting costs can be an uncertain activity. Short-term gain can endanger long-term growth. Focus first on those costs that the business can continue to grow without.

2. Price Changes
Prices can go up as well as down! Perform a ‘what if’ analysis to find our what the impact on profits would be with a 5% price increase or decrease.

3. Changes in Business Mix
Find out which are your most profitable products or services and use this information to plan for profitable growth.