Increase your profits by pruning your business
How much pruning have you done in your business lately? When I hear people talking about sales goals, they’re almost always referring to gross sales e.g. “I want us to achieve £5 million in sales this year, £10 million next year, and so on and so forth”. But should that be the over-riding target? Which one is more important; gross sales or net profits? Particularly if you are looking to maximise the value of your business and contemplate an exit at some point, shouldn’t the goal be to increase net profits? It doesn’t necessarily follow that if you double your sales you are going to double your profits. In many cases quite the opposite happens. Sales may increase, but the profits lag far behind. One of the main reasons is that firms get caught up in acquiring customers by any means but not the RIGHT customers therefore having an adverse affect on their profitability.