During these times with unprecedented rising costs, businesses need to consider how they create stronger more robust businesses through their systems, procedures, and processes to ensure they achieve optimised performance and financial sustainability.
This will help businesses fight back against the tide of significant and somewhat unprecedented rising costs, including:
- 5%+ increase to wages from October 2022
- 5% increase in Superannuation (compounding the wage increase further)
- 30%+ Increase in Electricity and Gas
- 100%+ increase in variable Interest rates since May 2022
- 10%+ increase in Insurance Premiums moving forward
- 8%+ Inflationary impact on all other general expenses
Having inbuilt processes in your business to tackle the inevitable rising costs each year will help you fight back to offset the forces that decrease your profitability.
Very few businesses truly squeeze maximum profit from their existing income, they tend to just focus on increasing sales, to grow the bottom line organically. Other businesses look to grow their profit only through expansion or upgrades. The greatest measure of organic profit optimisation is strengthening profit without a single dollar of investment.
With strong profitability controls, processes, and systems, businesses can achieve greater efficiency and therefore greater profitability. The current boom in tourism demand domestically has created a lack of urgency by many operators to fight back against the rising costs. However, with an expected softening of the market in 2023, now is the time to maximise the profit generated from current sales, providing greater financial security into the future.
Since establishing Loftus Business Advisory in July 2022, we have assisted businesses across Australia to identify combined increased profitability of over $3 million per annum from their current income.