Don’t work harder for less money

Knowing your profit from your profitability is essential when measuring private practice financial performance. Ebert Hyman explains.

For smaller businesses, the primary objective is often one of survival through maximising profits – ‘the bottom line’ – and minimising risks.

Increased profits do not necessarily result in increased profitability, and it’s important to read the signs to avoid working harder for less.

Consider the following simplified accounts for Practice A over two years: