We apply our Benchmarks around the 4 key areas to improve a business:

* Increase gross profit - either in dollars or as a % of revenue
* Improve personnel productivity - control the wages cost
* Optimise expenses
* Control the asset base.

The first three of these tactics will help to generate or retain more profit: enough sales are being made, and at the right gross profit margin, and the outlays on staff wages and non-salary overheads are being targetted into the right areas to make the business sustainable without being extravagant.

The fourth tactic ensures that the extra profit is not tied up in unnecessarily high levels of (eg) equipment or stock or debtors and so on.

So when a firm works on these four key aspects, they should be generating more profit AND seeing it show up in better cashflow. Once a firm has better cashflow then the owners can decide how to spend it:

* should they reinvest in the business?
* should they pay down some debt?
* do they want to take some cash from the business as some type of dividend?

Our Benchmarks reports direct an owner's attention to these four key areas, so they can see which part of the business needs improvement, and how much improvement they should aim for.