Leaky bucket

Are profits leaking out of your business bucket?

It’s profit reporting season. Do you have your latest financial accounts back from your accountant yet? Does the Net Profit seem lower than you expected? Maybe the profit is leaking out somewhere.

Your business can be viewed as a kind of bucket.  In the top you pour revenue, which comes from your marketing, sales and production efforts, then deduct the direct and indirect costs of producing that revenue.  Unfortunately everyone’s bucket leaks and so the amount left over (as net profit) is often a lot less than it could be and what is required to balance the effort and risk that you assume as the business owner.  It leaks out through holes such as: too many overheads, insufficient margin, working with the wrong clients, burning hours on fixed price contracts and a number of other ways.