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Have you heard the phrase ‘sales are for vanity, profit is for sanity’?
It’s spot on and emphasises that while a high turnover may sound great, if your business isn’t making a profit, the higher sales go, the larger loss you are likely going to make. Profit reflects the true health of a business. Get the profit formula right, then look at growing your sales.
Cashflow is also often overlooked but is crucial for maintaining operations, profitability and stress levels.
So, if you’re going to measure two things, make them:
1. Profitability – run your Xero profit and loss at least monthly, ideally weekly.
2. Cashflow – check your business bank balance weekly if not daily.
When one of these items is struggling, identify why and make changes immediately.
If you need our help with this – we are only a phone call away.
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