Focus On Profits Not Revenues!
At some point every business risks falling into a Black Hole. A black hole is when a firm’s revenue first surpasses €100,000 and there’s an increased demand for staff but not enough capital to pay for new employees. If you want to escape the black hole you have to aim for 10 to 15 percent pre-tax profitability. To put it another way getting through a black hole is like driving from Donegal to Kerry. Even if you fill the tank from the start if you guzzle fuel too quickly without adding more as you go (or if you incur losses but don’t build profits as you grow), you’ll never make it to Killarney!
That’s precisely why your goal should be to accrue healthy profits while you grow. Focus on profits. By reinvesting profits and building your capital reserves you’ll make it through that black hole. The benefits of being profitable while you’re in a black hole don’t end when you get out of it. If you decide to sell your business, historical profitability will have a significant effect on your company’s value. Prospective buyers will want to see your last three years of pre-tax profits and business equity (a widespread measure used to gauge a company’s value). As a result a company that has achieved 10 to 15 percent pre-tax profitability will have a substantially higher market value than another firm with smaller profits or none at all. After all every business owner wants to achieve the best optimal market value for their company (whether for sale or IPO).
Contact Us at Avid Partners on 0818 303087. Email us at advice@avidpartners.ie. We love to hear from small businesses and how they are doing! We can help you focus on profits!
Extracts from Simple Numbers, Big Profits. Blinkist Blog
Scenarios:
-
"A breath of fresh air. Your firm demonstrated enormous commercial understanding in turning around negotiations with a potential target vendor. I admire your style and ability to drive the deal forward. Many thanks." -
"I would like to say I'm very happy with your service, especially the audit team, your staff are always friendly, helpful and a pleasure to deal with." -
"Your business approach to clients is very impressive. I have always found that when explaining the types of service on offer, it is always concise and straight forward. The level of trust that clients place in your company and its staff speaks volumes." -
"I would like to take this opportunity to say how much we are impressed with your company's professionalism, it has been a pleasure working with you all and we look forward to working with you in the future." -
"Avid Partners - Accountants & Business Advisors are an excellent firm of accountants, their quality ethos is outstanding." -
"I have dealt with Jamie O' Hanlon, of Avid Partners - Accountants & Business Advisors Chartered Certified Accountants, for a number of years as he is auditor to one of my clients. I have always found him to be professional and responsive in his approach." -
"Service is second to none; there is always someone at the end of the phone for any business advice. The staff are very easy to get along with, very approachable and know exactly what they are talking about" -
We at Fitzies Bar have worked with Avid Partners - Business & Financial Advisers for over five years. We find that the advice and support offered to us in addition to all of our book-keeping requirements to include payroll, VAT, etc. is invaluable and has helped to contribute to our continued growth especially in these challenging times. I would have no hesitation in recommending Avid Partners. -
Jamie and his staff are a pleasure to work with. They respond promptly to any queries we have and are critical to our financial planning and the future needs of our business. I would highly recommend them to anyone interested in accounting services. -
We at Stillorgan Cycles have used Jamie and his Team at Avid Partners – Accountants and Business Advisers for over five years. We have found that the retail advice and support offered to us is second to none and has helped to contribute to our continued growth especially in these challenging times. I would have no hesitation in recommending Avid Partners. -
I met Avid Partners through a local business networking group. We had been using the same accountants for years and found that in these harsh economic times that we were not getting good enough value or service. We were very impressed by the company's professionalism and enthusiasm and genuine interest in helping us get the most out of our business. As a result we are now clients of Avid Partners and are thrilled with our decision. -
After meeting Avid Partners with a view to changing our accountants, we came away with a better deal financially and a feeling that we were in capable hands. We feel that Avid Partners has a personal interest in the welfare of our business. Avid Partners have given us great advice, help and support and respond to our day to day queries with speed and efficiency. We feel it was a great move for us to change to Avid Partners.
