Financial Guide for SMEs - SME Corporation Malaysia

Financial Guide for SMEsFinancial Guide for SMEsSection II : Improving Business FinancesImproving business finances means you need to take a practicalapproach to implement new processes that allow you to monitor thekey aspects of your business profitability and cash flowChapter Four – Maintaining ProfitabilityIt is very easy for profitability to be eroded if you do not measure andmonitor on a regular basis. Therefore, it is important to understandhow to use the tools available to continuosly evaluate the profitability ofyour businessTopic Hint TipProfitability MeasuresUsing the profitability measures providedwill ensure that you are aware of anyreduction in profit as it occurs andunderstand what level of sales isrequired for the business to generateprofitCompare your profitability measures to thebusinesses within the same industry to ensurethat you are being competitive and achievingmaximum profit potentialDiscounting SalesYou may want to consider offeringyour customers add-on services asan alternative to offering discountsExpense ManagementKeeping a close eye on your expenseswill ensure that you maintain theprofitability of the business your expensesLook for opportunities to join with other businessesfor “group” buying that can provide discounts on171171chapter 7-13 p79-181 Eng.indd 1718/15/11 5:03:11 PM