Does your business run under the law of success?

 

Article 1:          Revenues > Expenses = Profit

Article 2:          Profit = stay in business

Article 3:          Liquidity = pay your bills

 

In summary, you need profit to stay in business. Profit generates sufficient liquidity to pay invoices on time and has a major impact on return on investment (ROI). 
 
Question:         How do you insure a reasonable income?
 

In theory, generating profit is quite easy. Just increase your revenue and decrease your expenses at the same time. In result, the profit will increase.

In real life, it is much more complicated than that.

  
Revenue = sold products / services X price per unit
But to increase revenue,

  • what is the current, what the best product life cycle?
  • does the domestic market generate sufficient revenue?
  • do you need to offer different products / services?
  • do you need to approach new, maybe foreign markets?
  • is the price not set too high and therefore not competitive?
  • is the price not set too low and therefore generating a loss?
  

Expenses = sum of all costs (fixed and variable)

The type of costs are shown in the profit and loss statement (P&L).
But... 

  • do you know the cost centers where expenses are originated?
  • do you know every single cost unit who drives your expenses?
  • do you know the fixed and variable costs of your business?
  • do you know the best mix for reaching break-even shortly?
  • do you know when it is better to make or buy a product?
  • do you know which discount still insures a profit?
 
For answering all profit related questions, it takes much more than a fundamental education in Controlling.

In fact, since every company produces waste and has a tremendous potential of unused capacities, it requires a high level of experience!

Fortunately, our CEO and Senior Consultant combines an academic background with a work experience of more than 20 years.          Our service of success is proven in practice and identified in Projects. 

 
Just get in touch with us and we will improve your profit now!