5 Ways Australian Businesses Can Maximise Profit in 2022

For a business to make profit in Australia in 2022 it will take focusing on the basics while keeping in mind the context of this year and the uniqueness it may represent. Businesses can maximise profit in 2022.

There will be challenges and opportunities in 2022 which are unique to this year, especially what seems like the first half of the year presently with the covid outbreaks across Australia, but it is also critical to get the basics rights.

Profit is arguably the purpose for businesses and so it is critical to do what you can as a business owner to get it right.

This article will outline how business owners can focus on critical areas of their business to increase their chances of making a profit in 2022.

1) Focus on your gross profit

When thinking about your gross profit you need to be thinking about both your gross profit as a percentage and your gross profit as an amount.

Your gross profit as a percentage will give you an idea of your operating productivity and how efficient your business is. It is especially important to look at your gross profit percentage compared to similar businesses.

Your gross profit amount will give you a picture of how much money in total you are making from your goods or services. It’s important to know the difference between your total gross profit and your total net profit.

Read more about gross profit in our article here.

2) Examine overhead structure

Your overhead structure may be different in the type of pandemic environment of 2022. While this year may not have full lockdowns in Australia, many staff will be off from work which may cause abnormalities in your overheads.

In 2022 it is critical to examine your suppliers. Across Australia and the world there has been a continued disruption to supply chains due to individuals getting sick

It is always a good idea to visit your supplier list for your overheads to make sure you are getting value for your dollar on your suppliers.

3) Look at your finance costs

We are currently in a very low interest rate environment with the official rate sitting at 0.1% still as of February 2022.

If you happen to have been at the same financial institution for a number of years you might find that their pencil might not be as sharp as it used to be.

Reviewing your finance costs may be often overlooked by business owners but it is a critical area where profit of the business overall can be improved by shopping around.

4) Look at your wage cost structure

Many businesses and industries measure their efficiency differently, but the key thing is to ensure you have clear insight into the efficiency of your business in terms of your wage structure.

Once you have clear insight into your business, examine whether there is any wastage in your wage cost structure and therefore room to reduce costs and improve profit.

5) Review your processes

As always, it is critical to get your processes right.

With staff needing to isolate due to covid exposure in 2022, things might become temporarily chaotic for many businesses in Australia. When things get chaotic, processes are more important than ever because they give people a structure to fall back on.

Further, your processes should drive the efficiency in your business. Reviewing your processes gives you an opportunity to increase efficiency and decrease wastage in your business.

If you would like help with your business, please get in touch.