When it comes to running a business, it is all about the numbers. While most businesses look at overall revenue, there is a much more critical number all businesses should be looking at, especially those in professional services — your profit margins.
Profit margins serve several critical purposes. First, comparing your profit margins to averages in your industry serves as a benchmark. If the average profit margin is much higher, it may be time to adjust the way you do business.
Tracking your profit margin over time can highlight how strategic changes are impacting your firm's bottom line.
So, how does your profit margin compare to your industry? First, let's make sure your profit margin numbers are accurate.