Some questions you may ask yourself – if the answer to any of these questions is no, you will need to consider some of these following tactics:
Are you on target to meet your budgeted sales level? Review your marketing strategies.
Are all your products making a positive contribution? Consider doing a product profitability analysis which will analyse the relationship between selling price and total unit cost, demand for a product and break-even analysis.
Is your level of gross profit high enough? Review your pricing strategies or reduce your cost of sales.
Aged debtors too large? If the level of debtors rises, this could be because your sales are increasing or because your debtors are taking longer to pay.
Are you still profitable? Review your budget to note what is the underlying cause of your profitability issues.
Do I have enough working capital? If you do not have enough working capital you will not be able to meet your financial commitments. Customers need to pay faster, review stock on hand, as well as overheads.
Katrina Brennan, Principal, SRJ Walker Wayland Business Growth Advisors, Accountants and Auditors, Level 2/2 Innovation Parkway, Birtinya, 5301 9957, srjww.com.au
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