Unlock Your Business Profit – Part Two

 This week we will be diving into part two of the Unlock Your Business series.

Revenue

Revenue, also known as income or sales, is a number that should be monitored ideally on a monthly basis. Similarly to “The One Number”, it is crucial not to just concentrate on revenue but the inputs that composes revenue.

How do we plan for Revenue?

The best place to start is usually looking over the past 12 months and taking apart the components that makes up revenue. This is how we can identify and improve the areas of revenue.

For ways to increase your revenue:

1. Increase the number of customers

2. Increase the average transaction size

3. Increase the frequency of transactions per customer

4. Raise your prices

Profit

Similar to revenue, profit is found on financial statements and often referred to as “The Bottom Line”.

Profit is a key number in a business, but definitely not the all in all. Increasing profit can be achieved through increasing revenue or reducing cost of sales and overheads.

Business owners often have the mentality of cutting costs to increase profit instead of looking at it as a bigger picture.

 A question that we should consider is “how do we bump up revenue by $10k, rather than reduce expenses by 2k”.

 Strategies to increase sales revenue:

• Increase productivity of your staff – recognise and reward staff contributions with staff performance reviews

• Develop new product lines – Survey your customers about new products

• Increase your prices – Check if you have priced your goods and services correctly and if you could increase prices without reducing sales.

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Over a decade Success Accounting Group has partnered and worked with over a thousand business owners and we know what key numbers to look at that can take your business to the next level of PROFIT.

So book a 15 minute Chat to review the 5 numbers of your business with our Financial Coach Lan Nguyen.

 

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