How sustainable is your profit performance?

By Azets

23 Aug 2021

During the pandemic with restrictions in the UK and worldwide it’s been a challenging time for many businesses. However, in some cases not being able to operate at all or learning to in a different way has given businesses the time to stop and reassess their business and objectives and enhance their operations.

The change in circumstances all businesses have had to navigate in this last year has created, for some, an opportunity to deep dive into the business and reconsider internal processes that may have been outdated or never reviewed owing to time pressures of running the business whilst providing first class service.

Rightly so, businesses will have focussed on cashflow during the last 12 – 18 months. As the world begins to open again, now is the time to consider and ensure, businesses are returning to profit quickly – and effectively for the long term.

Partner Melanie Langton-Davies discusses key areas of the business to review for profit.

Customers

Identify clients who pay the invoice amount on time, and look at the extra costs and time some clients demand due to special requests, being slow at paying your invoices or questioning the costs. The time you put into these extra requests could be time you spend looking for new customers who value the product you offer and recognise the cost associated.

Combine this strategy with an incentive for your current customers to initiate referrals and you will gain more business.

Internal processes

So often processes are set and agreed upon but not reviewed, challenged or enhanced. Take time to review internal processes regularly and adapt them as business develops and the way of doing business changes too. An example of profit improvement review using internal processes would be looking at month end process and customer payment dates using the data held in accounting software. By highlighting slow payers businesses can  challenge why some customers or clients are not paying within agreed terms therefore negatively impacting profit.

Products and services

The last 12-18 months have made us all think about the products and services we offer now and in the future. Restaurants have diversified into takeaways based on their main menus, smaller independent businesses have improved and enhanced their online offerings and delivery or click and collect, garages have offered pick up and drop off services for servicing and MOTs.

Every business has to adapt as the way in which the world does business changes, however in more recent times the products and services being offered now and in the future should ensure they include the scope for social distancing and working from home.

Importantly, when reviewing what products and services to offer, the costing and profitability should be high on the agenda to ensure any new offering doesn’t cost too much to make or do and is profitable.

An expert business advisor can help advise on any new products or services being considered and the positive or negative impact to the business in relation to profit.

Stock

Ensure stock levels are at the right level. If stock levels are too high they are tying up cash which could be used for making more profit, trying something new or investing. If stock levels are too low businesses may not be able to accept a customer’s order therefore impacting profit, and possibly creating a bad customer experience.

Costs

Review all business expenses on a line by line basis and ensure the business is on the best rates. Light, heat and phone bills can often be renegotiated and should be reviewed annually before any fixed contract expires.

Benchmarking

Taking the time to compare your business to one also in your industry can help identify areas for improvement. Benchmarking with a trusted business advisor can highlight quick wins to increase the profit in a business. A business advisor with clients in the same sector will have access to lots of data that can help drive strategic business decisions and increase profit.

A new mantra

We control the business, the business doesn’t control us. Melanie suggests this mindset when reviewing profit – understanding that for so long businesses may have focussed on client and customer care whilst running a business and remaining compliant with HMRC.

Using this mantra can reframe how SMEs perceive running a business – importantly being that SME leaders are the ones in control.

Take time out to plot and plan the future of the business. Write the plan down, review it regularly and expect the plan to change and evolve as the world and way in which business is done changes with time. Take control of the business, seek trusted business advice to reach and achieve the goals and objectives set.

Get in touch

Our team of trusted business advisors have helped many SME clients review their business for profit and helped many businesses return to profit quickly pre COVID and especially during. Cash is critical in a business, it ensures survival. Our team of experts can help ensure your business makes profit now and for the long term to ensure your business’s finances can be sustained.

To discuss reviewing your profit or to strategise on how to generate more profit in your business, speak to your usual Azets advisor or contact [email protected].

Latest news

1

Chiptech announces major innovation initiative at high-profile reception with the New Zealand Prime Minister in London. The Rt Hon Jonathan Reynolds, the Rt Hon Christopher Luxon and the Rt Hon Steve Reed (L-R Front Row) David Hammond, and Daniel Knowles

Chiptech announces major innovation initiative at high-profile reception with the New Zealand Prime Minister in London.

30 Apr 2025

2

Northstone secures full planning permission for 50 new homes in Edenfield Edenfield housing development

Northstone secures full planning permission for 50 new homes in Edenfield

29 Apr 2025

3

Ring Stones Maintenance and Construction celebrates completion of Dovestone Gardens Dovestone Gardens launch

Ring Stones Maintenance and Construction celebrates completion of Dovestone Gardens

29 Apr 2025

4

PHX Training welcomes new business leader to drive learner success Louise Kirby

PHX Training welcomes new business leader to drive learner success

29 Apr 2025

5

Lidl to invest half a billion pounds in its expansion as it eyes sites in Lancashire Lidl

Lidl to invest half a billion pounds in its expansion as it eyes sites in Lancashire

29 Apr 2025

Pc Prestonmacan Gif980x120 March
Background image for hub sign up block

LBV Hub

Leverage Lancashire Business View platforms

Post your news
Post your events
Post your offers
Build your network
Improve your SEO
Gain coverage in the magazine
Sign-up
Events
LBV122 May/June Launch Event
121 Lancashire Business View Magazine Launch
Networking
21 May 2025

LBV122 May/June Launch Event

Lancaster and Morecambe College, Lancaster, LA1 2TY

08:30 - 10:30

Sub36 Networking
Networking
11 Jun 2025

Sub36 Networking

British Jewellery School, Scorton, PR3 1BA

15:00 - 17:00

Lancashire Net Zero Carbon Conference
Net Zero Carbon Social 1200px 2
Networking
18 Jun 2025

Lancashire Net Zero Carbon Conference

Crow Wood Hotel & Spa Resort, Burnley, BB12 0RT

08:30 - 13:00

Lancashire Built Environment Conference 2025
BEC 315 X 315 Px
Networking
25 Sep 2025

Lancashire Built Environment Conference 2025

Blackpool Football Club, Blackpool, FY1 6HX

08:30 - 13:00

CMI Level 5 Management and Leadership Course
UCLanAerialCampus.jpg.jpg
LBV Hub Seminars
21 Feb 2025 - 21 Feb 2026

CMI Level 5 Management and Leadership Course

Preston Campus, Preston , PR1 2HE

09:00 - 17:00

CMI Level 5 Project Management Course
UCLanAerialCampus.jpg.jpg
LBV Hub Seminars
21 Feb 2025 - 21 Feb 2026

CMI Level 5 Project Management Course

Preston Campus, Preston, PR1 2HE

08:00 - 17:00

RISE - The Academy for Female Leaders and Managers
WENDY BOWERS RISE Illustrstion copy.jpg.jpg
LBV Hub Seminars
02 Apr 2025 - 08 Oct 2025

RISE - The Academy for Female Leaders and Managers

East Lancashire Chamber of Commerce, Clayton le Moors, BB5 5JR

09:00 - 15:30

Planning for the future + navigating Inheritance Tax changes
Planning for the future + navigating Inheritance Tax changes for website.png.png
LBV Hub Seminars
01 May 2025 - 01 May 2025

Planning for the future + navigating Inheritance Tax changes

Stanley House Hotel, Mellor, Blackburn, BB2 7NP, Blackburn, BB2 7NP

08:00 - 10:30

Advantage: AI – A Workshop for Business Leaders – May 2
EV-land-2025-05B.png.png
LBV Hub Seminars
02 May 2025 - 02 May 2025

Advantage: AI – A Workshop for Business Leaders – May 2

Door4 Office, Burnley Wharf, Manchester Road, Burnley, BB11 1JG

09:00 - 11:00

A night at the races
1.png.png
LBV Hub Dinners / Balls
02 May 2025 - 02 May 2025

A night at the races

Morecambe FC, Morecambe, LA4 4TB

19:00 - 23:59

Innovating business solutions through PhD Partnerships
30478 Skills Bootcamp open day setting.jpg.jpg
LBV Hub Networking
07 May 2025 - 07 May 2025

Innovating business solutions through PhD Partnerships

University of Central Lancashire, Preston , PR1 2HE

14:30 - 15:30

Celebrating 50 years of KTP
UCLanAerialCampus.jpg.jpg
LBV Hub Networking
07 May 2025 - 07 May 2025

Celebrating 50 years of KTP

University of Central Lancashire , Preston, PR1 2HE

16:00 - 18:00

Advertise with us

Reaching 50,000 members, our print, digital and event platforms offer a fantastic way to raise your business profile and help you grow.

Find out more Lbv121 Online Graphic
Subscribe now

Weekly news bulletin