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Business by design Part 5: The more you sell the more you make…not always!
Clear Vision • Mar 02, 2017
The ASIC publication about factors that influence the success or failure of a business that I’ve been referring to in recent articles makes particular mention of trading losses. 34% of businesses cite this as a reason for why they didn’t succeed.
Now you might be thinking, well that’s pretty obvious, if you don’t make a profit you won’t survive…but really it raises a number of issues about why was the business not trading profitably?
The first of these I’d like to address is profit margin. Or understanding how much profit is actually involved in each product or service you sell.
Getting a handle on this is critical for your business. Here are some quick tips and ideas for you to think about.
- Don’t assume the more you sell the more you make. Many businesses fail to appreciate that some of their products or services cost more to produce or supply as than they return in sales.
- Understand how much profit you make for each product or service. With the help of a good accountant you should be able to work through the input costs and overall share of business costs that each product or service requires. Compare this to the sales price of the product or service and you might be surprised
- Compare your products and services to each other and you might find that selling 100 of a particular profit won’t do nearly as much as selling 10 of something else. You can then use this information to inform how your marketing and sales time and money is spent.
- If a core product or service doesn’t turn much of a profit but is still critical to your overall business volume its time to look at input costs.
- What costs are involved in each of your products and services? Can suppliers be renegotiated for better pricing? Are your processes too inefficient? Could the same work be done by less people or less expensive staff? Is the creation of the product or service overly complicated? Can you sell a similar product or service for a similar price but for a lower input cost?
These are just a few ideas that you might consider to improve your trading profit or loss. We invite you to contact Clear Vision for more ideas that are specific to your business. You might also wish to consider our recently CFONow.com.au service and the incredible benefits your business can enjoy when you harness the power of a Chief Financial Officer without the overheads of a full-time employee.
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In a world that often feels chaotic and uncertain, it's easy to get caught up in the hustle and bustle of life, forgetting to pause and appreciate the simple joys that surround us. But amidst the challenges and hardships, there is always a glimmer of light waiting to shine through the darkness. Today, let's embark on a journey to explore the uplifting and positive aspects of life, reminding ourselves of the beauty that exists in every moment. Gratitude: A Key to Happiness Gratitude is a powerful tool that can transform even the most mundane of days into something extraordinary. Take a moment each day to reflect on the things you're grateful for, whether it's the warmth of the sun on your face, the laughter of loved ones, or the beauty of nature. By shifting your focus to the blessings in your life, you'll find that joy naturally follows. Embracing Imperfection Life is messy, unpredictable, and imperfect – and that's what makes it beautiful. Instead of striving for perfection, embrace the flaws and quirks that make you unique. Celebrate your successes, no matter how small, and learn from your mistakes with grace and humility. Remember, it's okay to stumble along the way – it's all part of the journey. Finding Joy in the Little Things Happiness doesn't always come from grand gestures or monumental achievements. Often, it's the little things that bring the most joy – a kind word from a stranger, a hug from a friend, or a quiet moment spent watching the sunset. Pay attention to the small moments of beauty and wonder that pepper your day, and you'll find that happiness is never far away. Spreading Kindness and Love In a world that can sometimes feel cold and indifferent, kindness is like a ray of sunshine breaking through the clouds. Make it a priority to spread love and positivity wherever you go, whether it's through a simple act of kindness or a heartfelt compliment. By lifting others up, you'll find that you lift yourself up in the process. Cultivating Inner Peace True happiness comes from within, rooted in a sense of peace and contentment that transcends external circumstances. Take time each day to nourish your mind, body, and spirit – whether through meditation, mindfulness, or simply taking a walk in nature. Cultivate a sense of inner peace that will sustain you through life's ups and downs, allowing you to navigate challenges with grace and resilience. Embrace the Journey Life is a journey filled with twists and turns, highs and lows, but it's also a journey filled with beauty, wonder, and endless possibilities. By embracing the bright side of life, finding joy in everyday moments, and spreading love and kindness wherever we go, we can create a world that is a little brighter, a little kinder, and a little more beautiful for us all. So let's embark on this journey together, with open hearts and open minds, ready to embrace all that life has to offer.
Boosting Your Superannuation: Seven Powerful Strategies
When it comes to being a Director of a company, there are administrative requirements that must be complied with, including keeping ASIC in the loop. We all hate paying unnecessary fees, and ASIC loves to charge fees. To avoid late fees, ASIC must be told about any changes to company details, including your business or residential address, within 28 days. If your company's information changes, please let us know so we can notify ASIC on your behalf. Example: Jarryd gets a late fee Jarryd recently moved his company to a new storefront. In the rush of changing to his new principal place of business, he forgot to update his address details with ASIC. A month later, Jarryd logged into his online account to change his address to reflect the address of his new principal place of business. Because it was outside the 28 day timeframe, the company was charged a $93 late fee. If he had waited longer and lodged the change of address more than a month late, the company would have been charged a $387 late fee. To avoid fees in the future, Jarryd realises it's important to update his details as soon as they change. In summary, be like Jarryd and realise the importance of advising Clear Vision Accountancy Group of any changes. Example supplied by ASIC
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