Are you a business owner struggling with sleepless nights over cash flow? Fear not, we’ve got the tips you need to help your profits soar and get a good night’s sleep.
As a small business owner myself, I know how overwhelming it can feel when there’s so much that needs to be improved in your business, but you’re not sure where to start. That’s why I’m sharing some key steps to boost your profitability.
Starting With Your Turnover...
The first thing to look at is your turnover – how many invoices are going out the door, and what’s the average value per invoice? Next, examine your profit margins. What’s your gross profit as a percentage of your turnover, and how does this compare to industry standards and your own past performance? Finally, take a close look at your net profit as a percentage.
There’s no one-size-fits-all percentage that works for every business, but the goal should be to improve your margins and net profit year-on-year. That way, you can reinvest in your business or enjoy some extra income.
Getting The Support...
It can be lonely running a business, but don’t try to go it alone. Bringing in support, whether that’s an accountant, business growth advisor, or part-time financial director (FD), can make all the difference. Just be sure to find someone who will really challenge you and push you out of your comfort zone.
What should you expect from a good FD?
First and foremost, they need to ensure your bookkeeping is up to scratch, as quality data is the foundation for good financial management. Then they should help you create a detailed financial plan, setting goals for profits, cash flow, and balance sheets.
Crucially, the FD should give you a clear “scoreboard” to track your progress. They’ll need to unpack the key drivers behind your numbers, whether that’s invoice volumes, average values, or cost control. Armed with that insight, you can work together on an action plan to hit your targets.
Don’t worry if you don’t have an accounting background – a good FD will take the time to explain things in plain English and educate you on the key numbers. Their role is to serve you, not the other way around.
