We find that many business owners do not pay enough attention to gross margin management as a way to improve profitability. The beauty of improving your gross margin is that the benefits usually flow straight to the “bottom line”. That is, an increase in gross margin can usually be achieved without a corresponding increase in overheads. For example, if a company is turning over $2M, a 5% increase in gross margin will produce a $100,000 improvement in net profit.
Gross Margin management can often produce noticeable results in a short space of time, particularly for those businesses selling time and materials. Actions to be considered include:
At Compass South, we have a track record of working with business owners to achieve significant improvement in the gross margins of their businesses using our tried and tested Business Success Programme. Our website has a number of testimonials from happy business owners.
If you would like to learn more about how gross margin can be improved in your business, please feel free to contact Michael Hesp on (027) 220 6570 or the Compass South trusted business advisor nearest to you.