Could you be driving more margin from your product and services?
Is your margin being eroded by waste and inefficiency?
Are your overheads commensurate with your style and size of business? And are you getting a healthy profitability to sales ratio?
Profitability, which is reflected in Return on Investment (ROI) and Earnings Before Interest and Tax (EBIT), is the result of careful management of two levels of expenditure in serving the customer.
The two groups of factors that help you deliver profitability are:
- Deliver Gross Profit through delivering product and services to a defined plan based on known costs that enable us to match our expected speed/quality/volume matrix. The supply chain needs to be working effectively and responsively, our distribution capability needs to meet the customers' needs and, product and service quality needs to match our customers' and our own expectations.
- Retain Net Profit after paying all of the non-product/service delivery expenditure as planned, such as our people, premises, information and IT, Sales, General & Administration costs, financing and taxation costs.
This should result in a targeted EBIT that is reflective of the effort and risk that the business owners share and a satisfactory ROI.
Click the button below to download the Deliver Profitability Workbook or, if you can't wait for all the videos in this series, dive straight into the assessment to find your #CriticalFew.