Every business can improve its profitability - its "bottom line". Sometimes a single factor can significantly increase the profitability of a business, but for most businesses increasing profitability is a matter of creating a framework for implementing a number of small improvements gradually, ideally built into day-to-day processes and operations.

There's no one solution that will work for every business, but there are three key areas that every business can consider when aiming to increase profitability. These are:

·                     reducing costs

·                     increasing turnover and increasing productivity

·                     increasing efficiency

You can also look at more major changes to your business, such as expanding into new market sectors or developing new products or services

Examine your options

Look around your business to see where you can be more efficient. A number of small measures can have a surprising impact on your profitability.

Your current position

Analyse your present capabilities, strengths and weaknesses. Using key performance indicators (KPIs) will quickly show how well you are managing your profitability.

KPIs to examine when considering your profitability include:

·                     past, present and future sales

·                     costs

·                     working capital

For example, falling sales, deteriorating working capital and rising costs are all typical indicators that your profitability is suffering.

Your costs

More effective purchasing can increase your gross profit margins.

Find ways to cut waste and uncover hidden costs. Find out what your sales are actually costing you - you may find that some customers are not as profitable as you thought.

Find ways to get more productivity from your staff. Staff are most business' largest cost - raising their effectiveness can boost profitability.

Your turnover

Review your sales operations. Ensure that you are targeting the most profitable customers with the right product offering. Consider your offer - can you sell other complementary products to profitable customers?

Plan for profit

In most cases, a combination of these measures will give a useful boost to profitability. It's a very good idea to build these measures into your business plan.

This is process improvement.  Nobody and/or no business is perfect, hence process improvement is a methodology that must be placed into practice daily.

One key point to mention- corporate charter... without a mission statement to guide the person/business, one may as well be chasing the sun.