Articles Tagged ‘Increase profit’

Profit – The Truth

Monday, May 14th, 2012

Too many business owners struggle with the importance of pursuing profit in their businesses. You probably struggle with this in your business, too. Why do I use the word “struggle”? Because there is little reinforcement or support for the importance of profit from bankers, accountants, our professional peers, or even those we spend time with in our personal lives, including family and friends.even our church families. This lack of understanding and support, combined with what you hear 24/7 from news outlets have managed to turn “profit” into a six-letter obscenity. Frankly, our culture knows very little about business, and it’s this underlying knowledge deficit that has made profit synonymous with greed.

But make no mistake: Profit is the most powerful term in the business lexicon. Despite this revelation, we too often forget what profit can do for us in our businesses. Let me define for you why profit must be a prime objective for your business:

Profit increases cash in the business: Profitable businesses grow their cash position if they are not using that money to reduce debt. So if you want more
working capital (and have cash-on-hand for just about anything), profit will create this opportunity.

Profit increases equity in the business: Profitability (flowing into retained earnings) is the primary way to increase equity in your business. The amount of
equity directly impacts leverage and this impacts how fast your revenue can grow.

Profits provide more money for shareholders: When a company is profitable, dividends can be paid to those who have invested in the business. In other words, their risk
can be rewarded.

Profit increases the ability of the company to borrow: The debt-to-worth ratio is one of the key elements lenders look at to determine if a business will be granted
more debt. If the company has three dollars in debt for every dollar in equity, borrowing more money is probably not a viable option. Profit is the key to help
leverage your ability to borrow.

Profit funds growth: Growing revenue creates growth in accounts receivable, inventory and other assets. If one side of the balance sheet grows, the other side
has to keep up and that only happens with increases in liabilities and equity. Businesses that are not profitable will have limits on revenue growth.

Profit pays down debt: Profitable companies will pay down debt much faster than those businesses that are just getting by. Profit becomes cash which can be used to
reduce or pay off debt.
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31 Easy Ways to Reduce Fuel Costs

Tuesday, May 24th, 2011


Over the last few months, the price of fuel has kept climbing and the impact is dramatic on small businesses that have scores of vehicles on the road. Most of my clients are experiencing 40% to 55% increase in fuel prices over the same period last year. The increase in fuel costs has had owners scrambling on ways to slow the increase. In this article, we have found 31 ways to help you reduce the cost of fuel in your business. These are broken down into 5 sections: 1) maintaining the vehicle, 2) purchasing fuel, 3) driving, 4) new vehicle alternatives and 5) the obvious. As I read through this list, there were some I had forgotten about, others I didn’t know and some that just make sense.

MAINTAINING THE VEHICLE

Tire pressure – Even slight under inflation represents a 2% reduction in MPG. If every driver in the United States improved their vehicle’s gas mileage by 2%, we would save nearly 3 billion gallons of gasoline each year. If your tires are under-inflated, your vehicle has to work that much harder to spin them. The friction caused by these flabby tires could be sucking your gas mileage by 2mpg or more. Not to mention the premature tread wear that will cost you serious cash down the road. Check your pressure with a digital tire gauge for the best possible accuracy. Check them when they are cold, since driving the car warms and expands the air inside, giving a high reading. The recommended pressure for your tires is usually given on a label inside your door well.

Tire alignment – Crooked alignments work against your engine, robbing power and hurting fuel economy.

Get a tune up – Not only do regular tune-ups prevent breaks downs, they also improve gas mileage. A number of auto mechanics estimate that an engine can burn up to 50% more gasoline without proper maintenance. They also note that spark plugs in poor condition can reduce gas mileage up to 12%. Incorrect fuel ratio, bad spark plugs and incorrect spark timing can have a big effect on gas mileage.

Engine oil – Use a good engine oil, preferably a synthetic or standard oil treated with a friction reducing oil additive. These have been known to improve fuel economy by as much as 12%.

New high performance air filter – A dirty filter impedes airflow into the engine, which decreases performance and economy. A dirty or clogged air filter can reduce your vehicle’s gas mileage by up to 10%, which at today’s prices, is the equivalent of adding about 30 cents to each gallon of gasoline you buy. Consider a K&N filter which is cleaned rather than changed; which are much less restrictive than throw-away paper filters, plus they’re more environmentally friendly. Compare this to a performance air filter which uses either cotton or foam filtration material. Air flows much easier through these performance air filter materials which puts plenty of oxygen into your engine for burning fuel. With the extra air on hand, your engine’s computer responds by using less fuel per air part.

The result is a more efficient fuel mixture that draws more power from every drop of gas injected into your engine. More power from every drop equals – you guessed it – better gas mileage. How much of an improvement? The actual miles per gallon vary by vehicle, but a 1-2mpg boost is common.

Engine tuning with a power module or programmer – Automakers tune their stock vehicles to account for drivers of all different styles, from lead-footed teens to soccer moms to your grandmother. Safely tinkering with some of these settings can not only yield some newfound power and performance from your engine, but it can also improve your gas mileage.

Power modules are simple to install and use. After easy installation that takes less than half an hour, your engine is reloaded with expertly-tuned settings for air/fuel ratios, shift points, spark timing and more. These modules are painstakingly developed with maximum power and efficiency in mind, including better fuel economy. An immediate seat-of-your-pants power gain will be noticed. Going back to stock settings is easy – simply remove the module and your original engine parameters are back.

BUYING FUEL
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