03 July 2008

Has your business grown too quickly?

When your business has had sustained rapid growth and margin decline or losses at the same time, a red flag should be raised.

Increasing sales at the cost of margins is a condition that we come across far too often. Typically it occurs over time “naturally” as management teams often don’t have the systems and controls in place to understand by product or by customer how the increase in sales is affecting their profitability. Failure to pass on raw material or input costs is a key issue as management teams are too afraid of losing customers.

At the end of the day if you have faith in your products and/or services then at some point you need to trust in that and hold your ground or price increases, particularly if failure to do so may place your business in jeopardy.

When was the last time you checked your product range and conducted a pricing and margin review?

Our Vantage Performance team is looking forward to interacting with you again.

Have a great day,

Vantage Performance Team
Turnaround Management Specialists

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