You work hard as a business owner, so use these steps to extract more profit from it.

A client’s business was making annual sales of £640K but only paying him £18k. Using the steps below, we found simple little problems on every job were crushing their margins. The fix was simple and increased their profits eight-fold to £160k. Here’s a breakdown of the process to achieve it.

Step #1: Look For Symptoms in Your Accounts

Your accounts are clues to what’s going on inside your business. Become a detective, using these clues to detect the crime.

• Poor overall sales point to your business not doing enough

• Poor profit margins say you’re not making enough per sale

• Inflated business expenses - your business spends too much

Step #2: Identify The Facts

To understand what’s beneath the numbers, follow the clues…

• Why have sales fallen?

• What’s the cause of poor margins? Prices, costs or problems?

• What makes up the 80% of your expenses? Staff? Rent? Borrowing?

With the facts in hand, dig to the next level…

Step #3: Prosecute The Root Cause

Find the action or decision causing the poor profit. Hiring too many staff, poor business processes, mis-pricing etc. Be dispassionately honest with yourself.

Step #4: Apply The Simple Fix

Solve the problem in the simplest way. Keep it simple stupid, in the words of Kelly Johnson, legendary lead engineer of Lockheed’s Skunkworks division.