The teams in the Enterprise Challenge know what market share is, they know how to handle cash flow, so what next? James tackles gross profit in this week’s Top Tip…
Gross Profit essentially is the difference between sales revenue and the total costs of producing the good/service. The larger the sales revenue and the smaller the total costs, the greater the gross profit.
The profitability of a company is the primary driver behind its success; incredible revenues may sound impressive, but if the cost to the business of generating those revenues are significant, the business may only make a very low gross profit, or, even worse, a loss!
If the aim is to maximise your gross profit, watch your costs and keep them as low as possible but also focus on increasing your sales revenue. Think carefully about how you can keep your costs down AND generate more sales whilst maintaining good quality of your good/service- it isn’t easy but if you’re creative and think outside of the box, the profits will start rolling in.