1. Ensure managers (and other employees) are focused on profitability - but without losing sight of the need to manage cashflow.

2. Identify the key drivers of profitability; set and monitor key performance indicators (eg sales per employee, gross margin).

3. Avoid distractions: for example, one-off projects which don’t play to your strengths or contribute to your strategic goals.

4. Create plans with measurable objectives and set budgets; learn from experience to make continuous improvements.

5. Continually gather market information; build a dialogue with key customers and suppliers.

6. Anticipate the knock-on effects of any changes you plan.

7. Focus on a niche market you understand.

8. Invest in advertising and other promotional techniques to increase sales volume; actively sell and deliver a service that builds customer loyalty.

9. Maximise the value of sales: consider moving upmarket and charging the highest price you can justify for the product; innovate to stay competitive.

10. Focus on your most profitable customers and products.

11. Specify the right quality of supplies and negotiate favourable prices; monitor competing supply offers.

12. Monitor and control overhead costs and eliminate unnecessary activities.

13. Maximise the cost-effectiveness of assets: base purchasing on lifetime costs; sell unnecessary assets (or sub-let surplus capacity).

14. Recruit the right employees; provide a working environment, training and motivation which maximise their effectiveness.

15. Create systems to reduce errors and wasted time; create policies to reduce the need for managers to repeatedly make the same decisions.

16. Invest in information technology and other labour-saving equipment.

17. Share best practice across the company.

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Do's & Don'ts

Do:

Identify the key drivers of profitability.

Focus on profitable customers and products.

Invest in building sales.

Control costs.

Create systems which improve efficiency.

Learn from experience.

Don’t:

Ignore cashflow.

Waste effort on distractions.

Make changes without considering the consequences.

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