[Mike Halliday]

Regardless of the words we use to describe these things, the important thing is how much money are you left with after everything is paid for. That is what pays for your standard of living.

I could be turning over billions of pounds and feel very pleased with myself for building such a massive company however if my expenditure is only £1 more than my income my business is dead. The sad fact is many businesses and individuals operate just like this.

really?........ how? .........many carpet cleaning  business are running at a loss?

 I would think this is untrue,  some  might run at a low profit margin but running at a loss I wouldn't have thought so.

as for turnover being unimportant this is also wrong, your turnover is very important  as this is a baseline for what your net profit can achieve, if your turnover is £100,000 then you have the potential to have a net profit of that figure, but if your turnover is £100 then you will never have a net profit greater than £100 even if you have zero expenses . its better to have the higher turnover even if your net is low as you will alway have the potential to earn upto the turnover amount.

[JandS]

Think I ticked the wrong one, is this turnover, profit before tax or profit after everything is paid.
I've ticked the total profit after everything taken off.

[andre w]

Why can't I see the results to this poll , I haven't voted because I turn over zero at this moment it time is that the reason I don't see the results 

[Your Cleaning Matters]

Guys
Turnover is vanity
Profit is sanity
Simples

[JandS]

Cash is reality.

[Kev Martin]

Regardless of the words we use to describe these things, the important thing is how much money are you left with after everything is paid for. That is what pays for your standard of living.

I could be turning over billions of pounds and feel very pleased with myself for building such a massive company however if my expenditure is only £1 more than my income my business is dead. The sad fact is many businesses and individuals operate just like this.

really?........ how? .........many carpet cleaning  business are running at a loss?

 I would think this is untrue,  some  might run at a low profit margin but running at a loss I wouldn't have thought so.

as for turnover being unimportant this is also wrong, your turnover is very important  as this is a baseline for what your net profit can achieve, if your turnover is £100,000 then you have the potential to have a net profit of that figure, but if your turnover is £100 then you will never have a net profit greater than £100 even if you have zero expenses . its better to have the higher turnover even if your net is low as you will alway have the potential to earn upto the turnover amount.

Your turnover is your earnings!  It is the gross and then ultimately your net profit that counts.  Turnover means nothing and you will never retain the full turnover figure unless you spend nothing to earn it which is impossible unless it is a royalty payment and even then you have to pay tax on that.  If your turnover is £100,000 it means SFA if it costs you £99,500 to get there you might as well deliver newspapers.  I could boost my turnover to £Millions if I wanted to but what's the point if my net retained profit doesn't increase to match?

[Mike Halliday]

I guess you did'nt understand my post then  or maybe you just (as usual) did'n't read it fully before feeling the compulsion  to start typing

I will try and say it simpler ,

what  we want is to make the most profit  possible, but our profit will never be greater than our turnover (got it so far?)  so our turnover is not as you put it 'means sfa '  we will always have costs but  a high turnover gives a greater  profit potential then a low turnover as you can work on reducing  your cost to increase the profit  but if your turnover is low you can have it all as profit but it is still a low amount.

[Hilton]

Why can't I see the results to this poll , I haven't voted because I turn over zero at this moment it time is that the reason I don't see the results 

I'm not sure what you mean by results of the poll, they are there.
Also if you are doing zero in sales then I take it you have not started out yet...?

[Hilton]

Can I suggest that you desist from using boring Americanised cliched quotes, they add nothing and mean less.....

The poll was just to show an indication of 'sales' therefore business being carried out at various levels of development and I think it's achieved that.

[davep]

You get too see poll results once you've voted

[Hilton]

Think I ticked the wrong one, is this turnover, profit before tax or profit after everything is paid.
I've ticked the total profit after everything taken off.
[/quote
It's sales (turnover).

[Robin Ray]

Regardless of the words we use to describe these things, the important thing is how much money are you left with after everything is paid for. That is what pays for your standard of living.

I could be turning over billions of pounds and feel very pleased with myself for building such a massive company however if my expenditure is only £1 more than my income my business is dead. The sad fact is many businesses and individuals operate just like this.

really?........ how? .........many carpet cleaning  business are running at a loss?

 I would think this is untrue,  some  might run at a low profit margin but running at a loss I wouldn't have thought so.

as for turnover being unimportant this is also wrong, your turnover is very important  as this is a baseline for what your net profit can achieve, if your turnover is £100,000 then you have the potential to have a net profit of that figure, but if your turnover is £100 then you will never have a net profit greater than £100 even if you have zero expenses . its better to have the higher turnover even if your net is low as you will alway have the potential to earn upto the turnover amount.

Two word explain what I'm trying to say
1, Illustration
2, Hyperbole

My example is not a real scenario it is an example to explain the importance of profit in relation to turn over. It is purposefully exaggerated so you can t miss the point.

Turn over is very important but what is more important still is the profit generated by that turn over. Kevin has put this well imo.   

[Kev Martin]

I guess you did'nt understand my post then  or maybe you just (as usual) did'n't read it fully before feeling the compulsion  to start typing

I will try and say it simpler ,

what  we want is to make the most profit  possible, but our profit will never be greater than our turnover (got it so far?)  so our turnover is not as you put it 'means sfa '  we will always have costs but  a high turnover gives a greater  profit potential then a low turnover as you can work on reducing  your cost to increase the profit  but if your turnover is low you can have it all as profit but it is still a low amount.

I understood  your post and I read it twice before I replied but ultimately you are wrong!   You cannot make your profit reach your turnover figure. I think what you mean is:

" The higher the gross turnover the more potential there is to increase gross and therefore ultimately net profit"

I have run very successful businesses for 30 odd years and have met many people over the years doing the same at all levels and a lot of different walks of life.

Forgetting the normal cliché like

Turnover = Vanity
Profit = Sanity
Cash = King

Albeit very very true

My own theory, which I believe is the key to success:

Be ethical.
Stay legal.
Make it sustainable by investing in R&D, ongoing training and new equipment.

My accountants theory is:

"When a company is paying tax which increases year on year they have found the key to success"

Finally I think this statement sums it up and many will disagree

"A sole trading company from any walk of life with no brand recognition beyond their own name is more of a job than a company!  In order to be called a successful company it should be able to make money and ultimately a profit without the owner being there."

[Mike Halliday]

So you read it twice and still missed or ignored the one point I was making, perhaps a third time might have been advisable..... but as is often true reading does not imply understanding

My single point is that for you to say that turnover means 'nothing' or 'sweat damn all' is wrong. I have not said that profit can reach your turnover, you keep implying I'm saying this but I have not,

My point is profit can never be higher than turnover so profit is capped by the amount of turnover. you can make changes to decrease expenses which will increase profit but it will be limited by your turnover

It's a simple point which it was not for the fact it criticises something you have posted would be just accepted, but as you consider your thoughts  as though they are written by God  you have a need to type lots of irrelevant points  to bluff your point across

[Kev Martin]

So you read it twice and still missed or ignored the one point I was making, perhaps a third time might have been advisable..... but as is often true reading does not imply understanding

My single point is that for you to say that turnover means 'nothing' or 'sweat damn all' is wrong. I have not said that profit can reach your turnover, you keep implying I'm saying this but I have not,

" The higher the gross turnover the more potential there is to increase gross and therefore ultimately net profit"

My point is profit can never be higher than turnover so profit is capped by the amount of turnover. you can make changes to decrease expenses which will increase profit but it will be limited by your turnover

It's a simple point which it was not for the fact it criticises something you have posted would be just accepted, but as you consider your thoughts  as though they are written by God  you have a need to type lots of irrelevant points  to bluff your point across

Whatever!!!  Have it your way   Your right and I am wrong!!!

[Hilton]

I would just add to this point that the worlds biggest companies sales turn over wise have the lowest profits (pro-rata) even than you and me, the last time I looked Mr Zuckerberg was not going broke any day soon.

I particularly like the 'forgetting the normal cliché' then goes on to list one  and a bad one at that.

The sole trader quote, has some truth ,I agree with Michael Gerber that most technicians do not make good business men, also you do not need a brand name to make money without being present.

[jasonl]

"A sole trading company from any walk of life with no brand recognition beyond their own name is more of a job than a company!  In order to be called a successful company it should be able to make money and ultimately a profit without the owner being there."


This is an incomplete statement.  For example a residual income and future security is a good route for the sole operator, I have several solid clients who call month after month with multi hundred pound jobs across diverse sectors, 40000 of my turnover this year will be from near guaranteed custom.

[Kev Martin]

"A sole trading company from any walk of life with no brand recognition beyond their own name is more of a job than a company!  In order to be called a successful company it should be able to make money and ultimately a profit without the owner being there."


This is an incomplete statement.  For example a residual income and future security is a good route for the sole operator, I have several solid clients who call month after month with multi hundred pound jobs across diverse sectors, 40000 of my turnover this year will be from near guaranteed custom.

Jason

I did say some will disagree!!!

So you have staff who do the work for you when you are not there then?

[Mike Halliday]

This is a big  subject so there will always be differences of opinion.

Let me give an example of why I think turnover is massively  important.

If I was a hat maker and my hats where so good I was selling a £1,000,000 a year of them but I Made them on my kitchen table and when I worked out my cost I found I had a£1,000,000 worth of expenses

I was making zero profit but you could not get away from the fact that I had found a million pound market for hats.

I go on Dragon Den and tell the story of my hat bussiness and my £1,000,000 turnover and how I was making no profit.

Then Tucki Suliman (sp) says......." I can make the exact same hat in Turkey  at 10% of what it cost you" then all of a sudden I have the potential of making £900,000 a year profit   he makes me an offer of £500k  for 40% of my business..... I haggle him down to 25%  and we shake hands.

This is why turnover is important if I had gone of Dragons Den and said I take  £20,000 a year and £19,000 is profit no one would be interested as the no matter how much their invest I only have a £20k market

The   buzz word of profit & sanity is true but the bigger picture is about turnover and working out how much of it you can keep

[Doctor Carpet (Ret'd)]

Or in other words....

Providing we have good  profit margins which we keep constant (or even increasing) then it makes sense to chase that increasing turnover as ultimately we will have more cash in our pockets.

Simples!

Rog