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