Speaker: Hi, and welcome to KeysToSuccessClub.com, and this short series where we explore the different elements that comprise success. Enjoy it!
Mark Taylor: Hi, it's Mark here, and this is part of our Business Success Video Series, and today we are going to be talking about that hot topic, which is increasing profitability.
Now, the purposes of most businesses is to make some money, and people always seem to want to make more money out of their business, and some people aren't making enough money or even getting to a loss that becomes a really critical point.
So let's have a talk about some of the concepts of increasing profitability. On its very simple format, revenue minus cost, that's pretty straightforward. But what should you be looking at to increase the profitability of your business in the biggest way possible? Well, the first thing to remember is, to do this you need to have the capacity and the time and the head space to actually work on your business, not just in your business.
If you are looking for ways, if you are pedaling faster, yes, that may give you some more profitability, but you are likely to be missing something that's of more significance, which you would find if you are working on your business. So you need to make sure first of all that you have the capacity to work on your business and really time to step back and look and examine your business from a strategic point of view, not just from an operational point of view.
So what that does is, if you do that you will find out lots and lots of opportunities to improve the profitability on your business. You need to find a way to get the biggest levers.
Now, one of the things I have seen is, first of all, how do you prioritize? Are you really opening up your mind, because a lot of people will focus on cost cutting. Now, cost cutting can deliver some good profitability, its definitely a technique, but it is limited on how far you can go and how far you can squeeze any given business.
Now, on the other side, the revenue can often generate some really step changes, and obviously that can be a lot less painful than operational cost improvement. So you need to have your mind open to both areas, and then from that look at the biggest levers in your business.
So let's examine those points again. One, work on your business, not in your business. Two, make sure you are thinking broadly and creative enough to look at both revenue and cost, and make sure you then create some privatization on the opportunities. If you start working on the small things, you will end up putting a lot in and not seeing any result.
The other aspect to think about is, if you are really committed to increase your profitability, you may have to invest, and therefore there may be a short term reduction in profitability in order to get the longer term profitability. So it's really a question of where do you want to take up with this, how much courage you have, or how much cash flow you have in order to do that.
So I hope that's given you some food for thought. Those four points you could take with you and look at your own business and start to increase your own profitability. Thanks a lot.
Speaker: Thank you for listening to KeysToSuccessClub.com, where we inspire and enable people to achieve the success that they deserve.
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