Money & Profit

Your sales are growing. So why isn’t your profit?

Higher revenue can look good on paper, but hidden costs can quietly eat into your profit. Here’s what to look for.

Notebook: High revenue does not equal high profit.

A busy till tells you that customers are buying. It does not tell you how much the business keeps. Start by separating revenue from the costs required to earn it: stock, packaging, delivery, transaction charges and overheads.

Look at one product or service at a time. Subtract its direct costs from its selling price, then consider whether that contribution covers the business’s regular expenses. A product can sell quickly and still contribute too little.

Review discounts, waste and unpaid invoices alongside sales. Track costs consistently before changing your prices, and use the same period when comparing sales and expenses. Better visibility makes it easier to decide which sales are actually worth growing.

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Related · Business Glossary

Profit Margin

Profit margin is the percentage of revenue that remains as profit after certain costs and expenses are deducted.

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