business performance Archives | Numbers Knowhow

Sales vs Profit: Know The Difference

Mahmood Reza — Mon, 04 Dec 2023 11:11:53 +0000

Any business that strives towards success should be making money, or in business terminology, generating profit. One of the main reasons that businesses go under is because of the confusion between two seemingly similar, but in reality quite different aspects. It’s about the famous duo: sales vs profit. What do we mean by cash? How about profit? How are they related to each other? Which one of the two is more important for business growth? I will cover these points in this blog and bring you closer to understanding what really keeps your business going forward. So, let’s start bit by bit. Sales vs Profit: What is the difference? Whatever your business type is, there are products and/or services that you are offering to the end customers. Hopefully, they will recognise your worth and buy from you, not just now, but in the future as well. Now, whenever someone buys your product, you are generating sales. You are piling up the cash you receive from your customers. However, and here is the tricky part, the amount of sales is not actually your end profit. We now come to the sales vs profit part. So, yes, you have received the […]

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7 SMART KPIs All Business Owners Should Track Each Month

Mahmood Reza — Tue, 10 Oct 2023 08:08:10 +0000

SMART KPIs may be a new concept for you. However, you’ve probably heard of SMART targets or objectives which are often used for employee performance measurement. SMART stands for Specific, Measurable, Accepted, Realistic and Time-bound, but what does this mean when applied to KPIs? KPIs, or Key Performance Indicators, are metrics that businesses can track over time to identify progress (or lack of progress) toward their targets. Targets are long-term goals such as a 10% year-on-year increase in net profit. So use a SMART KPI focused on net profit to monitor your success monthly or quarterly towards reaching your target. Therefore when you closely monitor your SMART KPIs, you’ll know whether your target is challenging enough or perhaps too challenging. In addition, you’ll get vital information during the target period rather than waiting until the end. In much the same way that mid-term tests and mock exams help students review their progress toward their final exam, KPIs help business owners monitor how well they are doing. How do I choose which SMART KPIs to track? To clarify it’s important to realise there are dozens, if not hundreds of possible SMART KPIs you could track. Therefore you must use your overarching […]

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Three Tips For Business Growth

Mahmood Reza — Tue, 11 Apr 2023 08:35:41 +0000

Are you thinking about the best ways to grow your business? Wondering if you’re doing all the right things to enable growth? Then, read on for our three tips for business growth. More specifically, we are going to look at MCP. MCP is not some new medication or drug – MCP stands for mindset, capacity, and performance. The MCP approach is great for driving forward and growing your business. MCP is also needed if you don’t want your business to stand still. Do that, and be swept away by not doing anything. Introduction to MCP As mentioned above, our tips for business growth are having the right mindset, capacity, and performance. Now, these three words can mean different things to different people. To clarify what we mean by each of them, let’s go over the basics: Mindset: It affects how we tackle anything – it’s our attitude towards everything that comes our way in business (and in life). Capacity: Capability is another way to describe this, and no one business has it all. Think about skills and time to do all that’s needed in your business. Performance: Check & manage your progress. (Pro tip: have a plan in place, […]

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