{"id":323,"date":"2017-08-18T15:30:50","date_gmt":"2017-08-18T15:30:50","guid":{"rendered":"http:\/\/belbolcpa.com\/blog\/?p=323"},"modified":"2017-08-18T15:30:50","modified_gmt":"2017-08-18T15:30:50","slug":"how-a-10-productivity-increase-can-increase-profits-by-35","status":"publish","type":"post","link":"https:\/\/belbolcpa.com\/blog\/how-a-10-productivity-increase-can-increase-profits-by-35\/","title":{"rendered":"How a 10% Productivity Increase Can Increase Profits by 35%"},"content":{"rendered":"

\"\"<\/a><\/p>\n

A simple way to increase the profits of a business is to increase employee productivity. Each business and industry is unique, and here are several simplified illustrations to show the impact. The assumption is that if productivity increases by 10%, then sales will also increase by 10% due to extra capacity as long as there is demand for services.<\/p>\n

Example #1:<\/em> A service business that also has product costs, such as a tradesman, landscaper or other service provider that also sells products to a customer.<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n
Example 1 <\/strong><\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n\u00a0Current<\/td>\n10% Increase<\/td>\nDiff<\/td>\n%<\/td>\n<\/tr>\n
Sales<\/td>\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 1,000,000<\/td>\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 1,100,000<\/td>\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 100,000<\/td>\n10.0%<\/td>\n<\/tr>\n
COGS<\/td>\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 350,000<\/td>\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 385,000<\/td>\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 35,000<\/td>\n10.0%<\/td>\n<\/tr>\n
Gross Profit<\/td>\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 650,000<\/td>\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 715,000<\/td>\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 65,000<\/td>\n10.0%<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
Expenses<\/td>\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 500,000<\/td>\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 512,500<\/td>\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 12,500<\/td>\n2.5%<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
Net Profit<\/td>\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 150,000<\/td>\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 202,500<\/td>\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 52,500<\/td>\n35.0%<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

 <\/p>\n

Example #2:<\/em> A professional services business such as a consultant or architect, that does not sell products.<\/p>\n\n\n\n\n\n\n\n\n\n\n\n
Example 2 <\/strong><\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n\u00a0Current<\/td>\n10% Increase<\/td>\nDiff<\/td>\n%<\/td>\n<\/tr>\n
Sales<\/td>\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 750,000<\/td>\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 825,000<\/td>\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 75,000<\/td>\n10.0%<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
Expenses<\/td>\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 450,000<\/td>\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 461,250<\/td>\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 11,250<\/td>\n2.5%<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
Net Profit<\/td>\n\u00a0\u00a0\u00a0\u00a0\u00a0 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0300,000<\/td>\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 363,750<\/td>\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 63,750<\/td>\n21.3%<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

The big question to ask is how can this be accomplished? Here are 3 ways:<\/p>\n

    \n
  1. Having the Right Employees:<\/em> Making sure that an employee is a good fit for your business is crucial. There are traits beyond technical capabilities that you should look for, such as attitude, ethics, loyalty, and energy levels.<\/li>\n
  2. Training:<\/em> A highly trained employee will be much more productive because they will know what to do and how to do it correctly. Mistakes and lack of training cost time and money.<\/li>\n
  3. Better Scheduling:<\/em> Virtually every business needs to schedule their jobs, appointments, meetings, work, etc. Proper scheduling can easily be implemented and yield a very high return with usually little to no cost.<\/li>\n<\/ol>\n","protected":false},"excerpt":{"rendered":"

    A simple way to increase the profits of a business is to increase employee productivity. Each business and industry is unique, and here are several simplified illustrations to show the impact. The assumption is that if productivity increases by 10%, then sales will also increase by 10% due to extra capacity as long as there […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[2,3,90,7,8,13,15,18,65,138],"tags":[29,149,55,56],"class_list":{"0":"post-323","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-budgeting","7":"category-business","8":"category-debt","9":"category-expenses","10":"category-financial","11":"category-marketing","12":"category-new-jersey-tax","13":"category-taxes","14":"category-technology","15":"category-time-management","16":"tag-expenses","17":"tag-productivity","18":"tag-taxes","19":"tag-time-management","20":"entry"},"_links":{"self":[{"href":"https:\/\/belbolcpa.com\/blog\/wp-json\/wp\/v2\/posts\/323","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/belbolcpa.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/belbolcpa.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/belbolcpa.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/belbolcpa.com\/blog\/wp-json\/wp\/v2\/comments?post=323"}],"version-history":[{"count":1,"href":"https:\/\/belbolcpa.com\/blog\/wp-json\/wp\/v2\/posts\/323\/revisions"}],"predecessor-version":[{"id":325,"href":"https:\/\/belbolcpa.com\/blog\/wp-json\/wp\/v2\/posts\/323\/revisions\/325"}],"wp:attachment":[{"href":"https:\/\/belbolcpa.com\/blog\/wp-json\/wp\/v2\/media?parent=323"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/belbolcpa.com\/blog\/wp-json\/wp\/v2\/categories?post=323"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/belbolcpa.com\/blog\/wp-json\/wp\/v2\/tags?post=323"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}