Chartered Accountants & Business Advisers


3 actions to increase profitable sales

Profitable sales and business growth

Adopting a very positive approach to sales is vital to keeping your head above water and generating growth but selling alone isn’t enough – the key is to make sure you’re selling at the profit margin you want.

Here are three actions that will help you to increase profitable sales.

What are your selling prices at the moment?

Every business needs to have a price list for the products and services it sells and this should be reviewed against competitors’ prices where possible.

Market intelligence on prices is a lot easier to gather where you can see prices on competitors’ websites or in shops, but it’s a lot more difficult for service businesses. Nevertheless, try to find out what you can.

But your price list isn’t enough. The question is: what are your real prices once discounts, promotional deals and other adjustments have been applied?

And remember that selling prices aren’t just the tariff you might present to the next prospect. If you’re selling services then you might have most of your current client base buying from you this month and next month at prices agreed some time ago.

Key action 1 – review your actual prices, understand why the prices you actually charge might differ from your standard tariff and see what you can change for the better.

Do you know the costs of the sales you’re making?

Pure costs of sale can be thought of as costs that would not be incurred if the sale was not made.

So, if you’re selling sofas then the sale of the next sofa requires you to buy the sofa from the manufacturer, pay for delivery to the customer, pay the sales assistant a commission etc. But do you take account of all of these costs when setting your prices?

If not, profit will suffer.

In service businesses where you’re essentially selling hours and expertise you need to be running a timesheet system in order to understand how much time is being committed to each client and compare that against fees charged.

Not doing timesheets? Start NOW!

Sales revenue less the costs of sale is your gross profit – an absolutely vital performance indicator and one that you should always be trying to nudge upwards and not let slip.

Key action 2 – ensure you’re measuring your cost of sales accurately and that your gross profit is at the level you need it to be.

Also, see our blog on Proof of Profit.

Are you targeting prospects who will buy what you want them to?

Knowing your costs and your gross profit is essential but many businesses destroy value simply by selling in to the wrong market, or by positioning their products / services in the wrong place.

Taking a premium product to a budget audience will get you nowhere because customers, if they buy at all, will only be prepared to pay a low price that you won’t make a decent profit on.

A useful way to address this is to have a range of products / services which increase in quality and price as you move up the range.

Key action 3 – Segment what you offer based on price and quality and then point your products / services at the right audience.

There’s so much to consider when you aim to increase profitable sales and we’re only skimming the surface here.

We do a lot of work with business to look at profit margins.

If you’re interested, please give me a ring on 020 7125 0270 or email

Michael – @bluedotmichael

Related links:


Gross Profit Officer – appoint one today!

Fine margins

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