[telfordwindowclnr]

 

don't get too carried away by turnover mate. You could turn over 3-4 mil, but if your profit is 10k, a lot of us on here would beat the 3-4 mil guy hands down. I'm not interested in everyone's answer, but a better assessment of things would be to ask about turnover to profit ratios. Then you would know who has a good business. It is not always the guy with the biggest number.

So speaks an experienced man!

(We've got to stop complimenting each other's posts, people will think there's something going on! lol)

 

[Matt.]

Am certainly not the biggest, but by far the best

[robert mitchell]

As turnover increases costs usually go up .

So it often happens that profit can decrease with an increase of costs (insurance, staff, equipment etc).

The amount of profit you make is the most important figure.

You can have two businesses with the same turnover and very different profit figures.

Really?  That's an odd conclusion.

Let's take a couple of aspects.

You buy a PC to do your accounts when you reach a turnover of £50,000.  You're probably still using one PC when you have a turnover of £200,000.

You buy a 4040 RO when you're turning over £50,000.  You're probably still using the same 4040 when your turnover is £500,000, just much more efficiently.

I would suspect that of the items you mention, staff costs and equipment costs stay level in terms of proportional share of turnover.  I would also suspect that insurance per person is smaller the bigger you get.

So, contrary to what you've said, "As turnover increases costs usually go up" they may well decrease as a proportion of turnover, if anything, leading to higher profit margins and thus higher profits.



Still, this isn't really an argument about profits or turnover is it?  It's a justification for staying small.  Which is fine, but it doesn't make it correct.

Vin

No its not a justification for staying small.

Its not an argument either , the point i was making is that turnover is not everything .

In your business model where you franchise then your costs probably do not go up significantly but in other business models they will, for instance if you employ , have several vans, higher insurance costs , maintenance , maybe renting a unit etc etc.

A lot depends on how you run your business.

A high turnover is useless if your not making a profit.