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created, for some, an opportunity to deep dive into the business and reconsider internal processes that may have been outdated or never reviewed owing to time pressures of running the business whilst providing first class service.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

Latest news

1

Double-digit growth sees Inspired near £100m revenues Mark Dickinson Inspired Plc

Double-digit growth sees Inspired near £100m revenues

26 Mar 2024

2

Five-fold growth for Chorley safety products firm Hispec

Five-fold growth for Chorley safety products firm

26 Mar 2024

3

Fundraising success sees Stanley Women compete in Dallas Cup The Accrington Stanley Under 18s team which are currently in Dallas.jpg.jpg

Fundraising success sees Stanley Women compete in Dallas Cup

28 Mar 2024

4

Forward Thinking opens new franchise in South West 7386141d-8191-4a4c-b60c-0810e1692832.jpg.jpg

Forward Thinking opens new franchise in South West

28 Mar 2024

5

How the UK’s strategy to reduce net migration affects care work AdobeStock_89838327 (1).jpeg.jpg

How the UK’s strategy to reduce net migration affects care work

28 Mar 2024

Hwc 2024 Email Signature 980x120
Background image for hub sign up block

LBV Hub

Reach 50,000 members of the Lancashire business community

Post your news
Post your events
Post your offers
Company profile
Social reach
Magazine coverage
Sign-up
Events
Business Networking in Burnley - BNI Kudos
EVENT LISTING BNI Kudos.png.png
LBV Hub Networking
28 Mar 2024

Business Networking in Burnley - BNI Kudos

Prairie Sports Village, Windemere Avenue, Burnley, BB10 2FU

06:45 - 08:30

Business Networking in Lancaster - BNI Castle
EVENT LISTING BNI Castle.png.png
LBV Hub Networking
28 Mar 2024

Business Networking in Lancaster - BNI Castle

Vale of Lune RUFC, Powder House Lane, Lancaster, LA1 2TT

06:45 - 08:30

Business Networking in Preston - BNI Brunch
EVENT LISTING SIZING Brunch .png.png
LBV Hub Networking
29 Mar 2024

Business Networking in Preston - BNI Brunch

Samlesbury Preston Hotel, Preston New Road, Preston, PR5 0UL

09:30 - 11:00

Business Networking in Blackburn - BNI Infinity
EVENT LISTING BNI Infinity.png.png
LBV Hub Networking
29 Mar 2024

Business Networking in Blackburn - BNI Infinity

Hampton by Hilton, 2 Frontier Ave, Blackburn, BB1 3AL

06:30 - 08:30

Business Networking in Blackburn - BNI Vista
EVENT LISTING SIZING Vista.png.png
LBV Hub Networking
02 Apr 2024

Business Networking in Blackburn - BNI Vista

Hampton by Hilton, 2 Frontier Ave, Blackburn, BB1 3AL

06:45 - 08:30

Business Networking in Chorley - BNI Endeavour
EVENT LISTING SIZING Endeavour.png.png
LBV Hub Networking
02 Apr 2024

Business Networking in Chorley - BNI Endeavour

Oak Royal, Bury Lane, Chorley, PR6 8SW

06:30 - 08:30

Business Networking in Preston - BNI Diamond
EVENT LISTING BNI Diamond.png.png
LBV Hub Networking
03 Apr 2024

Business Networking in Preston - BNI Diamond

The Marriot Hotel, Garstang Road, Broughton, PR3 5JB

07:15 - 09:00

Business Networking in Lancaster - Eden Business Network
EVENT LISTING Eden Business Network.png.png
LBV Hub Networking
03 Apr 2024

Business Networking in Lancaster - Eden Business Network

The Borough, 3 Dalton Square, Lancaster, LA1 1PP

18:30 - 20:30

Business Networking in Accrington - BNI Zeus
EVENT LISTING SIZING Zeus.png.png
LBV Hub Networking
03 Apr 2024

Business Networking in Accrington - BNI Zeus

The Mill House, Corn Mill Yard, Accrington, BB5 5HX

06:45 - 08:30

Business Networking in Lancaster - BNI Castle
EVENT LISTING BNI Castle.png.png
LBV Hub Networking
04 Apr 2024

Business Networking in Lancaster - BNI Castle

Vale of Lune RUFC, Powder House Lane, Lancaster, LA1 2TT

06:45 - 08:30

Business Networking in Burnley - BNI Kudos
EVENT LISTING BNI Kudos.png.png
LBV Hub Networking
04 Apr 2024

Business Networking in Burnley - BNI Kudos

Prairie Sports Village, Windemere Avenue, Burnley, BB10 2FU

06:45 - 08:30

Business Networking in Blackburn - BNI Infinity
EVENT LISTING BNI Infinity.png.png
LBV Hub Networking
05 Apr 2024

Business Networking in Blackburn - BNI Infinity

Hampton by Hilton, 2 Frontier Ave, Blackburn, BB1 3AL

06:30 - 08:30

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 Lbv115 Online Graphic
Subscribe now

Weekly news bulletin