Is your business making a healthy profit? If not, do something about it now. Something drastic. There’s no sense owning and managing a business that’s not growing and generating a healthy profit. Why mess with it? Your time and talent are worth so much more.
Profit Enhancement & Cost Reduction
ABC Inventory Control to Boost Profit and Carve Out Tax-Free Cash
The skill of a company in procuring (i.e., purchasing) parts, product and managing inventory can be the difference between success and failure. This is because: 1. The profitability of a business — or lack thereof — is established by the gross profit margin. That is, the profit left over from each sale after the direct expenses are deducted. For many businesses, the primary direct expense is procured product.
Work Sampling: A Method for Assessing and Monitoring Productivity
Profitability is driven by productivity. You want to increase profits, so your task is to maximize productivity, which is basically a measure of output per dollar of capital deployed. It does not matter what percentage of your dollars (aka capital1) is spent on labor or equipment; the task is the same — to maximize yield.
Two elements drive productivity: Use rate and Output rate.
Time to Exercise Your Option to Buy Out a Partner?
There’s no doubt business profits are down so now might be a good time to buy a shareholder out and increase your ownership percentage. Just hope that shareholder doesn’t have the same idea.
Eight Easy Steps to Higher Profit (Internal Benchmarking)
Internal benchmarking is a simple method to determine your company’s profit potential based on your firm’s historical annual income statements. By analyzing at least five years of income statements you’ll be able to identify the best historical performance by line item or department. The question then becomes how do we repeat that performance? The beauty of internal benchmarking is it’s low-cost, relatively easy and effective. It can be your beacon of light for continuous improvement.
Health Insurance Costs Rising? Get Active, Start a Wellness Program
Every business owner knows health care insurance costs are rising and it’s difficult to keep it under control. But there is hope and it lies within a company wellness program, which can benefit you and your employees. Healthy people are cheaper to insure and research shows that health and wellness programs reduce medical costs and lower absenteeism. You will have to spend money to begin the initiative, but for every dollar spent you’ll get between $3.50 and $6 in return. That’s a heck of a return on investment.
Internal Benchmarking: Use Past Performance to Boost Future Profit
Internal benchmarking is a simple method to determine your company’s profit potential based on your firm’s historical annual income statements. By analyzing at least five years of income statements you’ll be able to identify the best historical performance by line item or department. The question then becomes how do we repeat that performance? The beauty of internal benchmarking is it’s low-cost, relatively easy and effective. It can be your beacon of light for continuous improvement.
Peer Benchmarking: #1 Tool for Improving Your Business
The reality is, humans have a hard time figuring out what is possible. The interesting thing is, the art of the possible is about envisioning the future, but humans really only move into the future by peeking into the past. It’s just the way we work.
Setting Priorities, Where to Look First
You want to reduce cost and improve profitability, but doing so takes time. And it’s not like you don’t have anything else to do. So where is the low-hanging fruit? Where can your efforts produce the highest yield?
The answer is pretty simple. As cost-cutting legend Harry E. Figgie, Jr. explains in The Cost Reduction and Profit Improvement Handbook, just lay out your income statement as follows*:
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