Finding your ‘GP Sweet Spot’ with Chris Beard

CHRIS BEARD, Director, The Accountable Boardroom

I’m Chris Beard. My passion for coaching comes from my personal experience of being 'busy' in my own business and learning from mistakes along the way. So, I built tools, processes, and metrics that I could use to teach as many business owners as I could and set about doing so.

Many business owners have a rough idea of their ideal clients, but their top revenue-generating clients often don’t contribute significantly to their gross profit. This realisation can be a game-changer. For example, an accountant I coached discovered that her top clients, who generated 80 per cent of her revenue, only contributed one per cent to her gross profit. Shifting her focus resulted in substantial profit increases without extra marketing costs.

LET’S DEFINE THE TERMS

Understanding your financial metrics, particularly your ‘GP Sweet Spot’, can transform your business.

The GP Sweet Spot refers to the optimal gross profit margin a business needs to identify to maximise profitability. It involves analysing financial data to understand which clients or products contribute most to the gross profit, helping businesses make informed decisions to achieve higher profitability without necessarily increasing revenue. Identifying the GP Sweet Spot has consistently doubled the net profits of the businesses I work with, and it can do the same for you.

Gross Profit is calculated as the revenue the business generates minus the cost of goods sold (COGS), including materials and direct labour. It represents the portion of revenue that exceeds these direct costs.

Net Profit is the amount left after all expenses, including overheads like rent, utilities, salaries, and marketing, have been deducted from total revenue. It reflects a business’s overall profitability.

The break-even point is calculated by dividing your monthly overheads by your GP percentage. This straightforward calculation provides invaluable insights into your business’s financial health.

The Accountable Boardroom

I founded the Accountable Boardroom during the Covid-19 lockdown to help business owners harness the power of accountability and financial acumen to drive success. The Accountable Boardroom has three tiers:

1. The Emerald Program:

This is our foundation. We meet every fortnight in a community format, breaking down each quarter into themes like margins, productivity, marketing, and sales. One critical exercise is finding your GP Sweet Spot.

2. The Emerald Plus:

Building on the Emerald Program, this tier includes one-on-one coaching sessions with me for more personalised guidance.

3. The Black Diamond Group:

This exclusive tier is for businesses meeting specific criteria, such as a minimum annual turnover. We meet face-to-face every six to seven weeks for intensive coaching sessions.

Accountability is the backbone of the Accountable Boardroom. In the Emerald Program, we support each other through a community group, share insights and hold each other accountable. The Emerald Plus tier adds one-on-one coaching for deeper dives into specific issues.

The Accountable Boardroom is more than just a coaching platform; it’s a transformative journey. Whether you join the Emerald Program, the Emerald Plus, or the exclusive Black Diamond group, you’ll gain the tools and knowledge to drive lasting success in your business. I’m here to help you avoid the mistakes I’ve made and achieve the sustainable growth you deserve.

Understanding your financial metrics is key to sustainable growth. The first step is to grab a copy of my eBook, The Ultimate Business Blueprint

www.chrisbeard.coach