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Advice from Perth-based Business Advisors about Improving Profits
It’s very common for business owners to face mounting operational costs, overlooked revenue streams and a workforce that could perform better if only the right strategies were in place.
If you’re feeling overwhelmed by the day-to-day pressures and losing sight of the bigger picture, know that you’re not alone and there is help.
At Munro’s, our seasoned business advisory specialists based in Perth and serving clients Australia-wide, can work with you to uncover profit leaks, streamline operations and boost sales performance.
Our approach is holistic and tailored to your unique circumstances.
When you’re ready to talk about what we could do for you, please book a meeting or send an enquiry.
Problem 1: Business Waste
How much profit is your business losing to hidden waste inside your operations? Waste elimination is one of the most effective ways to increase profitability in your business.
Solutions
Waste-eliminating culture
Outcome
Long-term increased profitability
Read Key Points & Transcript
Improving Profit With A Specific Work Culture
video key points
- Profit improvement requires a focus on the right structure, people, processes, in-demand products, and the correct customers in the short term, while the long-term goal centres on continuous prevention of waste, elements in the business that don’t add value or that customers wouldn’t pay more for.
- Identifying and eliminating long-term waste involves understanding where waste occurs, its cost, and strategies for reduction or elimination, a task that is straightforward yet intricate due to the necessity of a holistic approach.
- The eradication of waste requires a shift towards a culture of continuous improvement, necessitating effective communication across all levels of management and staff, and often the introduction of learning programmes to assist managers in transitioning to facilitators of action and improvement.
- Long-term profit improvement is a commitment to an ongoing process, though short-term gains are also achievable.
- Engage with the spam-free Profit Improvement Diagnostic to identify your top three strengths and weaknesses regarding profit improvement, encouraging proactive steps towards your business improvement.
Presented by: Drew Pflaum
video transcript
Profit improvement is both a short-term and long-term activity.
In the short-term, you will do well to focus on:
- having the right structure in place;
- the best people;
- great processes;
- in-demand products; and
- the right customers.
See the videos on Improving the Top Line and Improving the Bottom Line for more on those.
The purpose of this video is about the longer-term profit improvement goal of waste mitigation.
Waste refers to elements within your business that do not perform a value-adding role. They aren’t things that your customer would appreciate or be willing to pay more for.
All businesses have waste. However, the extent of waste can differ dramatically.
Long-term waste can be hard to find and is commonly referred to as invisible waste.
To get rid of it, you need to understand where it can be found, how much it’s costing you and how it can be reduced or eliminated.
This task is both a simple and complex thing to do.
It’s simple in that there is an over-arching framework to follow, with simple tools to use to help identify waste.
It’s complex in that successfully implementing long-term waste reduction generally requires everyone’s involvement.
During the transformation into a waste eliminating culture, managers and employees alike need to learn how to consistently communicate effectively on continuous business improvement. This likely means that learning programmes need to be deployed, particularly to help managers engage differently with employees, transitioning from more traditional managers to facilitators of action and improvement.
Ultimately, to reap the full benefits of profit improvement managers need to go into it committed to a long-term process. That’s not to say short-term benefits won’t be found.
So, what type of culture with regards to waste elimination do you have?
- Does your business accept that some wastes just happen?
- Do excessive costs, outdated processes or slow decision-making go unresolved for far too long?
- Or, are each of your employees’ champions of waste reduction?
Take the spam-free Profit Improvement Diagnostic to discover your top three strengths and weaknesses with respect to profit improvement.
Problem 2: Improving the Top Line
Every business is unique, but they can share common problems when trying to increase sales. Has your sales growth stalled? Are your sales prices right?
Solution
Targeted growth
Outcome
Profitable revenue growth
Read Key Points & Transcript
Improving the Top Line
video key points
- Improving the top line focuses on profitable revenue growth, emphasising the importance of ‘profit’ over mere sales increases.
- Essential to this is evaluating profit margins, including product and customer mix, pricing, direct costs, and conducting competitor analysis for benchmarking.
- Developing a strategic growth plan, guided by the overall business strategy, is crucial for directing profitable growth efforts.
- A comprehensive growth plan encompasses marketing, sales, complaint handling, discounting, and repeat business strategies.
- Effective implementation is critical to the success of any growth plan, with an emphasis on mindful execution throughout the process.
Presented by: Drew Pflaum
video transcript
In this video we’re going to talk about the short-term profit improvement goal of improving the top line, which is one of the three key areas for Profit Improvement. If you want to learn more about managing costs, see the Improving the Bottom Line video. If you want to learn more about waste elimination, see the Business Waste video.
Now, onto improving the top line, which is about profitable revenue growth.
Hopefully you have taken note of the word “profitable” in ‘profitable revenue growth’. There is little, if any, reason to seek increased sales if it’s not going to be profitable. This means you must check your profit margins.
Checking your margins means looking into your product mix – what you sell, your customer mix – who you sell to, your prices and direct costs. It should also include a competitor analysis, in other words, a benchmarking exercise.
Your overall business strategy is also vital in developing a growth plan, since it directs where you want to grow.
This all then helps inform your targeted growth plan.
A well-constructed growth plan will include, amongst other things, your marketing strategies, sales strategies, complaints handling and discounting strategies, and repeat business strategies.
All intertwined to help improve your top line.
The toughest part of any plan is usually implementation. Be very mindful of this throughout the whole process of seeking to improve profit through revenue growth. Ask us for help if you need it, it’s why we’re here.
Problem 3: Improving the Bottom Line
Do your costs only go up? Are you struggling to identify areas in your business where improvements can be made to increase profitability?
Solution
Strategic cost management system
Outcome
Costs under control
Read Key Points & Transcript
Improving the Bottom Line
video key points
- Cost management is one of the quickest avenues for profit enhancement.
- Strategic implementation of budgeting and forecasting systems is critical.
- Benchmarking is essential, comparing against past performance, competitors, and leading entities in similar risk industries to spotlight profitability enhancement opportunities.
- A multifaceted approach involving supplier negotiations, alternative explorations, process optimisation via AI and Robotic Process Automation, and recruitment enhancements is advocated to maximise profitability.
- The strategic cost management framework demands clear responsibility allocation, accountability, and periodic evaluations to ensure continuous improvement.
- To further explore profit maximisation, engage with the spam-free Profit Improvement Diagnostic, a step towards identifying strengths and weaknesses in profit enhancement strategies.
Presented by: Drew Pflaum
video transcript
Of the three key areas of profit improvement, cost management is usually the quickest to produce results.
The first thing you absolutely must have within a strategic cost management system is a superb accounting system. A system where your accounting records are accurate and up-to-date, almost in real-time.
The next things you should have are a budgeting and forecasting system. The budgeting and forecasting systems should be used to strategically fine-tune what your business’ financial position should be. Ultimately, these should help you gain clarity about your intended profit and return on investment.
In conjunction with this, benchmarking should also play a vital role. You should be benchmarking against your prior performance, competitors and best-in-class operators of other similar risk industries.
From these things, you will identify areas where improvement opportunities exist to increase profitability.
Actions which you may need to take include negotiating with suppliers, investigating and selecting alternatives, eliminating, optimising processes especially with AI and Robotic Process Automation, and enhancing recruitment and retention.
Very importantly, a strategic cost management system assigns responsibilities, incorporates accountability and has regular reviews.
Besides cost management, to seek further profit improvement you need to turn your attention to profitable revenue growth and waste reduction. The videos on Improving the Top Line and Business Waste provide further information about these other two key areas of profit improvement.
We now invite you to take the spam-free Profit Improvement Diagnostic to discover your top three strengths and weaknesses with respect to profit improvement.
When you’re ready for help, we look forward to the transformation we will achieve together.
Frequently Asked Questions About Improving Profits
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What are the common causes of lost profit in a business?
Lost profit can stem from inefficient processes, excessive operational costs, poor staff performance, tax-driven accounting as opposed to data-driven accounting and missed opportunities in sales or pricing optimisation. Our approach focuses on uncovering these hidden drains and turning them into opportunities for growth. -
How do Munro’s specialists improve profits for business owners?
We start by assessing your current performance, then together with you, we develop and implement strategies to eliminate waste and drive profitable revenue growth. This holistic process works on both short- and long-term issues, designed to ensure that over time, every facet of your business is aligned for better profitability. -
Are your profit improvement services available Australia-wide?
Yes. While Munro’s is based in Perth, our profit improvement, advisory and business accounting services are available to small and medium businesses throughout WA and across Australia. -
What is the pricing for your profit improvement service?
Our pricing is transparent and reflects the complexity of your needs. Please visit our pricing page for more information, then contact us for a personalised quote. -
Why should I choose Munro’s for profit improvement?
Munro’s has a long history of providing reliable, specialist-led business advisory and accounting services. With over 100 five-star Google reviews praising our proactive and responsive problem-solving approach, we’re committed to delivering real, measurable improvements in your profit. -
How do I get started with your profit improvement service?
Let’s begin with a free Get To Know Each Other meeting. You’ll meet with an experienced business advisor who will learn about your unique challenges and goals, then begin to work with you to outline a tailored approach that is designed to help you unlock hidden profit and drive long-term profitable growth.
Where To Begin
Come Along To An Improve Session
First Session is Free (incl. GST)
Upskilling Event for Business LeadersTop 2% ranked Australian Accounting Firm
Claims of being a ‘Top 2% ranked Australian Accounting Firm‘ (and similar claims) are based on two separate assessments conducted by Munro’s on 9-10 August 2023 and 1 December 2023. The ranking is derived from a comparison of the total of each accounting firm’s overall star rating multiplied by each firm’s quantity of reviews as shown on Google Maps. A total of 4,235 Australian accounting firms listed on Google Maps were identified for the earlier assessment, and a total of 4,301 for the latter assessment, which may not represent a complete list of Australian accounting firms. Munro’s claims are based on Munro’s best estimation and represent a snapshot collected at the time of each assessment. If the assessment was to be conducted today, then it is likely that Munro’s ranking would have changed – Munro’s may or may not be in the Top 2% today. Also, the methodology does not account for other potentially relevant factors such as quality of service, expertise, or client satisfaction beyond Google Maps reviews.
Read Key Points & Transcript
video key points
- Top 2% ranked Australian Accounting Firm is based on two separate Munro’s assessments of Google reviews for Australian based accounting firms on 9-10 August 2023 and 1 December 2023.
- Both assessments found Munro’s to be in the Top 2% (position 66 out of 4,235 and position 44 out of 4,301 for the assessments, respectively) when a ranking was derived from a comparison of the total of each accounting firm’s overall star rating multiplied by each firm’s quantity of reviews as shown on Google Maps.
- If the assessment was to be conducted today, then it is likely that Munro’s ranking would have changed – Munro’s may or may not be in the Top 2% today.
Presented by: Drew Pflaum
video transcript
In December 2023, we conducted a review of Australian accounting firms on Google Maps, based on star rating and quantity of reviews.
Out of the 4,301 Australian accounting firms we identified on Google, Munro’s ranked number 44, placing us in the Top 2% of Australian Accounting Firms. We’re thrilled to share this fact with you and share those reviews on our website. We’d also like to thank all our clients who left us those wonderful reviews.
Thank you.
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