You usually hear the phrase, “Productivity Equals Profitability”. But what about Proactivity? There are just over three months remaining for this year. How can you make the most of it? One way is to focus on your numbers now to find ways to increase your profitability. Don’t wait until January to do a review of your business finances, or it will be too late. Proactivity equals profitability in this case!
Where to be proactive
There are three focus areas you can look at now, that can help you make some significant differences by the end of the year in your profitability. Let’s break down each one:
- Proactive review of your Revenue: What is the biggest source of revenue for your business? What are your most profitable lines of business? What is your profit margin? Do you need to increase your prices? Do you need to advertise to obtain more customers/clients/market share? Do you need to launch a new offer? Answering these questions will give you some insight into what business decisions to make when it comes to increasing revenue.
- Proactive review of your Expenses: Where are you spending money that is not providing you a return on your investment? Are you paying for things you don’t actually need? Are you capturing your expenses appropriately in your bookkeeping system so you can easily analyze the data? Are there things you should invest in this year instead of waiting until next year, in order to optimize your tax situation? Expenses can get out of control very quickly if you are not paying attention and reviewing the data on a regular basis. Unnecessary expenses can be a profitability killer.
- Proactive meeting with your CPA: Are you taking advantage of all of the tax deductions available? Do you have the proper documentation in place to take those tax deductions? Have you been paying enough in quarterly estimated taxes or do you need to increase it? Are you optimizing your capital expenditures and depreciation? Meet with your CPA now to do a year-to-date review to make sure you are on track to optimize your tax situation for this year. The last thing you want is a surprise tax bill when you file your taxes. If you wait until after January 1st to have a discussion with your CPA, it is too late to take advantage of tax-saving strategies.
The time is now to increase profitability
Take the time now to increase your “proactivity” in order to increase your “profitability” – yes, you should increase your productivity, but you need to be productive in spending time on the things that are going to make a difference in your business. This means taking the time to review your numbers. As a result, you will increase your revenue, decrease your expenses, and optimize your tax liability. Proactivity definitely equals Profitability.
Reach out to book a consultation if you need help performing a review of your current business situation. Just don’t wait until January!
