7 reasons your business isn’t making more profit - and what to do about it

Most business owners in Warrington work hard, win customers, and keep the lights on — yet still ask the same frustrating question:

“Where’s the profit?”

It’s one of the most common challenges we help solve at Purple Accounts. Whether your turnover is growing or flatlining, there are hidden traps that quietly erode margins. Here’s how to spot them — and what to do next.

1. You’re Not Charging Enough

Many businesses undercharge — often to stay competitive or due to pricing hesitation. But low prices eat into profit and attract the wrong type of customer.

What to do:

• Review your pricing structure annually

• Benchmark against competitors in Warrington

• Add value instead of offering discounts

  
  

2. You’re Leaking Money Through Hidden Costs

It’s not always about how much you make — it’s often about how much you lose without noticing. Are you overspending on:

• Unused software or subscriptions?

• External suppliers or consultants?

• Overtime and inefficiencies?

  
  

Solution: Use cloud bookkeeping tools (like Xero) to track costs in real time. A good accountant will highlight the cost centres quietly draining your profit.

3. You Don’t Have Management Accounts

Many business owners only look at their accounts at year-end — when it’s too late to take corrective action. Without regular management accounts, you’re driving blind.

What to do:

• Ask your accountant for monthly or quarterly reporting

• Track cash flow, margins, and overheads regularly

• Use these insights to guide decisions

Related service: Management Accounts – Purple Accounts

4. You’re Saying “Yes” to Low-Value Work

Being busy doesn’t always mean being profitable. Taking on every client or job may fill your schedule — but not your bank account.

What to do:

• Rank clients or projects by profitability

• Focus on high-margin services

• Politely turn down work that doesn't meet your criteria

  
  

5. You’re Missing Out on Tax Reliefs

Without proactive planning, many owners overpay tax. Common areas where savings are missed:

• R&D tax relief (even for service-based businesses)

• Directors’ pensions and benefits

• Capital allowances

• Business vehicle and mileage claims

Action point:

Book a tax planning review. A few small changes could deliver major savings.

6. You’re Overstaffed or Underutilising Your Team

Staff costs are often your largest overhead. But if productivity is low or roles aren’t aligned to your growth, profitability takes a hit.

What to do:

• Assess whether your team structure supports growth

• Consider outsourcing admin-heavy roles

• Automate routine tasks where possible

  
  

7. You’re Only Reviewing Profit at Year-End

Waiting until the end of the financial year to “see how you did” is too reactive. By then, you’ve missed your chance to adjust course.

Better approach:

• Review key financials monthly with your accountant

• Set targets for profit, not just revenue

Good News: Profit Gaps Can Be Fixed

Improving your profit doesn’t mean taking on more work or cutting everything to the bone. It means:

• Pricing strategically

• Controlling costs

• Getting the right financial advice

• Making confident decisions with timely data

At Purple Accounts, we help Warrington business owners do exactly that — without jargon or stress.

Want to Make More Profit This Year?

If your business is working, but not rewarding you properly, we can help.

Book a chat with us!