Your Overheads Efficiency Ratio is Worsening
Are your Overhead Costs (AKA Fixed Costs) high? Reduce these costs and improve business profitability. Overhead costs include rent, permanent labour and other costs that do not fluctuate with your day-to-day production levels. They have a direct impact on your Operating Profit.
Determine Causes and Solutions
There is a tendency for Operating Costs to increase overtime. Is your business getting more sluggish? Is your business accumulating more “barnacles” that slow it down? You can measure and monitor your Overhead Cost efficiency over time and optimise your overheads and improve your profitability whenever the trend is going the wrong way.
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Learn to use the 12Faces Diagnostic Process to best advantage, click More Info.
Improve Business Profitability by Managing Overhead Costs
ScoreBoard is a 12Faces tool that extracts the hidden information in your Profit & Loss and Balance Sheet reports. Monitor this information on a monthly or quarterly basis. Then highlight and fix problems before they have gone too far.
Reduce your Overhead Costs and improve your Overheads Efficiency Ratio. Look at current procedures for any accumulated wasteful habits. Turn these around and then grow your business.
There is a tendency for Labour costs to increase faster than an increase in Revenue. As Labour is an expense, this has a direct impact on your Profits. Learn about measuring labour efficiency here.
Not sure where to start? Look at this collection of articles on Cost Reduction. Covers locations to abandon; supplier relationships; fixed costs; staff costs; products to discard; overhead margin analysis; labour efficiency ratio and more.
Either, your business has been operating for some time or you want to grow. Eliminate the wasteful habits; check your pricing and overhaul your costs. These will all drag on your Profitability. Your goal is Sustainable Business Growth. Then this is the course for you. Sign up now.
Find the extra information hidden in your Profit & Loss and Balance Sheet reports. Properly interpreted, these reports will unleash valuable information about the sustainability of your business. Following are examples of what you will find: could my business fail over the next 12 months; what is ruining my cash flow; how much will I get if I sell my business right now. Click here to see an example of a TrendBoard screenshot.
ChangeBoard is a Sensitivity Analysis tool. Are you thinking of increasing prices? Then undertake this with some surety, instead of flying blind. For example, a survey of 1,000 firms in Europe showed that an average of 11% increase in Profit was achieved by a 1% increase in Price. Additionally, ChangeBoard can predict changes in staffing; Profit; Cash Flow and Working Capital. Click here to find out more about Sensitivity Analysis and ChangeBoard.
How to use our Diagnostics
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Know of other Diagnoses and Solutions?
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