When it comes to working towards profit in your business, there are several important elements to consider. 

We’ve already seen how having a plan and knowing your numbers gets you off to a great start; so what’s next?

Manage your costs

Cost control is important in every business but managing expenses is not simply about cutting costs. The best business people know it’s more about getting good value from what you spend. 

You may have heard of the 80/20 rule. When applied to expenses it means that 80 per cent of what you spend gets spent on 20 per cent of the items. So that’s the first place to look. What are the key areas where you are spending money? How can you save in these areas? What can you do smarter or better? 

It might be worthwhile to ask your team for ideas; because they are working in the business every day and they may see things that you have missed.

Maximise your return on investment

To maximise your return on investment is a shrewd maxim of business. But what is your investment? Anything you spend time or money on. 

The big numbers are easy to find; they tend to include staff wages, your physical location and equipment. Marketing expenditure is another. 

In addition to these, there’s another investment you make on a daily basis which is harder to spot. It’s your own time. What you spend your time on is one of the most important areas to consider if you want better results.

The question then becomes “How can we use these investments more effectively to make more sales, produce more with the same resources and generate more profits?”

Coming up next: marketing, customer and team talks…