I deliberately placed this Guide early on in the Five-Year Entrepreneur Series as the core topics covered within it – once understood – really are the bedrock for smart planning and decisions thereafter. You see, at its core, running a professional service business comes down to some simple economics. Clearly, you need to be making a profit and growing your profitability. But, you knew that already right? The more interesting aspect is the three key drivers that lie behind professional service firm profitability; namely, margin, productivity and leverage. Understanding these components – their contribution and interaction – is pivotal to building a successful firm. Once properly understood, you can then monitor, review and manage these elements. The reality is this … those companies that do are already at a significant advantage over others … and almost inevitably more successful.
Keen to hear all questions/thoughts on this topic of profitability … particularly in relation to the checklist I offer for improving profits across these multiple aspects.
This reply was modified 6 years, 1 month ago by Dom.