There may be many options to choose from that can help you improve profitability. Analyse your strengths, weaknesses and capabilities for ways to improve.
Here are a few measures that can have a surprising impact on profitability.
1. Examine key performance measures: Falling sales, shrinking working capital, and rising costs are key indicators to monitor.
2. Manage your costs: more effective purchasing can improve margins. Eliminate waste of materials and time.
3. Review sales to long term customers: you may find out some customers are not as profitable as you thought.
4. Increase productivity: Staffs are the largest cost centre in most businesses. Increasing employee effectiveness can improve profits.
5. Review sales: ensure you are targeting the most profitable customers with the right product mix.
In most cases, a combination of these measures will give a boost to profitability. Incorporate these measures into your business plan and review frequently.
Be diligent and execute, execute, execute.