How to increase profit
Paul Seabridge
Business Investor, Global Entrepreneur, Mergers & Acquisitions, Amazon Best Selling Author #1, Founder OPC Capital Partners, my podcast Buy, Build, Sell
If you don’t produce regular accounts, you need to change this – the problem with P&L is that is telling you about the past not the future.
What I use a P&L for (for some quick wins) is that the only way to influence profitability is to increase revenues or cut costs or both.
So, to increase revenues (sell more) can take longer. Cutting costs can in most cases have an immediate impact.
I will go through line by line everything the business spends money on and ask, “Is this needed” and if the answer is YES, I then say, “but can I get this cheaper elsewhere”.
Some key areas could be:
Utilities – have you shopped around – have you got the best tariffs
Telecoms/IT – ditto
Stupid expenses – you may have water coolers in all your locations but is this necessary – you don’t need them – it’s a wonderful thing for staff & customers, but you don’t need them. There was one business I took over were they had 17 water coolers across various sites, 14 coffee machines (all provided free to staff) – in that business we saved about ￡30k by getting rid of them!
When switching suppliers, you can sometimes get cashback or referrals. In one company I moved their company pension from one supplier to another and they paid a ￡80k referral fee (even though I was moving the business!).
EVERY WEEK YOU NEED TO KNOW
A Who owes you money
B Who you owe money to
C How much is in your bank account
You are in a good place if C is more than A
You are in a good place if A + C is more than B
You need to cut your costs or improve your revenues if B is more than A & C or if B
Got it?
You need more money coming in that going out
About Paul
Paul Seabridge is a Cypriot/UK based Business Investor & Owner of Private Equity, Mergers & Acquisitions Firm Kleinsman Global LLC. He is sector agnostic buys, sells, invests in & merges SMEs in the US, UK & Europe. He also works runs a 3 day experiential training event for business owners were you can learn how to grow your business significantly, stably & quickly. You here from people that have been there, done it (sometimes more than once) and share their skills & expertise. The event also puts you in front of high net worth investors who are looking to invest in great businesses that want to scale. You can learn more & receive free tips & videos on growing a business at https://www.paulseabridge.com and www.paulseabridge.com/growth-summit/