Posts Tagged "profit"

Have You Made Your End of Financial Year Resolutions?

Posted by on Jul 12, 2017 in Blog

Have You Made Your End of Financial Year Resolutions?

There is always talk of New Year’s resolutions come the beginning of January. Some may relate to your personal goals while others are geared more specifically to your business. However, end of financial year resolutions are different altogether. They allow you to focus purely on your organisational goals and how your company will perform over the next twelve months. Coming up with a financial plan for your business is the best resolution you can make, especially while all the figures are still clear in your head from tax time. Armed with a solid twelve months of financials from the prior year, you can analyse your business performance and determine its financial health. Ask yourself these questions: How did your organisation fare from the previous financial year? What were your strong months? Did you see real growth? Were you profitable? Did you see a solid return on investments from your campaigns? What would you do again if the situation presented itself? What would you do differently? Build a budget Now before you go any further, it is important that you have a budget to guide your future movements. Are you planning any big purchases that your current level of cash flow...

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Smart Pricing Strategies For Entrepreneurs

Posted by on Jan 18, 2017 in Blog

Smart Pricing Strategies For Entrepreneurs

Effective pricing can be a difficult thing to ascertain. While you want to offer a great rate to your clients, you also want to make sure you are covering your costs. And then you have competitors to think about. Here are some smart pricing strategies for entrepreneurs and businesses alike. Introductory Offers An introductory offer is a great way to get your clients to try before they buy. It could be an offer of something for free or a heavily discounted product or service. Once you have your customers in your sales funnel, then you can slowly work your way up to achieving larger purchases. Competition-led Pricing When you are less experienced in the business world, it can be difficult to discern how you differ from your competitors. You may need to charge the same as your competition to make sure you are starting out on an even keel. Once you have been in the industry for a while, you can then work out whether your prices need to go higher or lower than your competitors to start seeing a real difference. Loss Leaders Is there one product that you can offer at a low price to bring your...

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Why is Your Profit Margin Important?

Posted by on Jun 29, 2016 in Blog

Why is Your Profit Margin Important?

As a business owner, there are a lot of figures that you need to keep your eye on. Several of these statistics serve as critical indicators of the overall health and long term stability of your company’s finances. One of the most important of these statistics is your profit margin, as it provides a quick glimpse into your company’s efficiency and performance. Since your profit margin is such a bellwether of your company’ overall condition, it can have a significant impact on your strategic planning process. Understanding it also enables you to take quick action and adjust course when there are signs of financial difficulty. Understanding Your Profit Margin There are two figures that you need to keep in mind when determining your profit margin, and that is your gross profit margin and your net profit margin. Determining these two statistics is generally a straightforward calculation. Your company’s gross profit margin is determined by dividing gross profit by its total income. You can define your net profit margin by dividing your company’s net income by its total income. Once you have determined these two figures, you can then use them to compare the performance of your business with other...

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Find Your Profit Leaks

Posted by on Sep 16, 2015 in Blog

Find Your Profit Leaks

As a small business owner, you are probably well aware that your business must operate at a profit if it is to survive for any length of time. Former UK MP and businessman Paul Marsden once famously said that, “business is all about solving people’s problems – at a profit”. But determining how much money you need to make in order for your business to be profitable in the long term is a bit more complicated than simply adding up all of the money that you’ve earned and subtracting it from the total cost of your production. While boosting your revenues, managing your cash flows and controlling costs are all important aspects of running a profitable business; if you aren’t making the amount of money that you should be, it’s very likely that you have a profit leak. Profit leaks come in many forms and can range from something as simple as losing out on revenue because you forget to invoice your clients promptly to having to pay a higher tax bill because your system failed to automatically record all of your transactions. Because profit leaks can come from so many sources, tracking down your profit leaks can be quite...

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What’s Your Break-Even Point?

Posted by on Jan 14, 2015 in Blog

What’s Your Break-Even Point?

Regardless of how much revenue your business brings in, it matters little if you aren’t turning a profit, as most businesses can’t operate at a loss for very long and remain open. It’s impossible to know whether or not you are making a profit, or even to begin to make plans on how you will cover your costs and begin to turn a profit, without first determining your break-even point. While determining your break-even point is an important essential task in strategic business planning, it’s really not as difficult a calculation as you might fear. Your break-even point is simply the amount of products or services that you must sell over a given period of time to cover all of your costs of doing business. Any amount that you sell over your break-even point is profit. Calculating Your Break-Even Point When calculating your break-even point, care must be taken to not leave out any of your costs. There are several types of costs that you will want to include in your calculations. Start-Up Costs Start-up costs are costs related to the initial creation of your business. They can include: Legal fees for drawing up contracts related to the startup...

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