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created, for some, an opportunity to deep dive into the business and reconsider internal processes that may have been outdated or never reviewed owing to time pressures of running the business whilst providing first class service.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

Construction begins on new Civil Service office building in Talbot Gateway Alan McBride Muse Will Town Defence Infrastructure Organisation Jennifer Chard Defence Business Services Cllr Lynn Williams Blackpool Council Garry Bowker Vinci

Construction begins on new Civil Service office building in Talbot Gateway

20 May 2025

2

Skiddle raises over £750,000 for charities Skiddle cheque presentation to Alder Hey Hospital

Skiddle raises over £750,000 for charities

20 May 2025

3

Former Victorian Hotel approved for residential conversion The site

Former Victorian Hotel approved for residential conversion

19 May 2025

4

REVOLUTION PARK: Work starts on Darwen’s new home of advanced manufacturing Oliver Webber, Tracy Clavell-Bate and Tim Webber from Barnfield Group with Cllr Phil Riley, second from right, Leader of Blackburn with Darwen Council

REVOLUTION PARK: Work starts on Darwen’s new home of advanced manufacturing

19 May 2025

5

Two Cuckoo Gins named winners in The Gin Guide Awards 2025 Mark Long

Two Cuckoo Gins named winners in The Gin Guide Awards 2025

19 May 2025

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 1200pxtrident 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

Amber River True Bearing quarterly investment seminar
LBV Hub Seminars
22 May 2025 - 22 May 2025

Amber River True Bearing quarterly investment seminar

Cottons Hotel & Spa , Knutsford, WA16 0SU

16:00 - 18:00

The Business Network Central & East Lancashire
LBV Hub Networking
22 May 2025 - 22 May 2025

The Business Network Central & East Lancashire

Mytton Fold, Langho, BB6 8AB

11:30 - 14:15

Preston Freelancer Meet-Up: May
Freelancer Meet-Up May.png.png
LBV Hub Networking
22 May 2025 - 22 May 2025

Preston Freelancer Meet-Up: May

society1, Coworking Space, Preston, PR1 3LT

10:00 - 11:30

Liverpool Business Expo 2025
https---cdn.evbuc.com-images-881365363-4862066883-1-original.20241023-085714.jpeg.jpg
LBV Hub Awards
23 May 2025 - 23 May 2025

Liverpool Business Expo 2025

Aintree Racecourse , Liverpool , L9 5AS

09:00 - 15:00

Advantage: AI – A Workshop for Business Leaders – May 29
Artboard 15.png.png
LBV Hub Seminars
29 May 2025 - 29 May 2025

Advantage: AI – A Workshop for Business Leaders – May 29

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

09:00 - 11:00

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 LBV122 Online Graphic
Subscribe now

Weekly news bulletin