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Unlocking the Power of Operating Leverage for a More Profitable Business

As a business owner, it’s important to understand the health of your operations and identify areas for improvement. One key metric that can help you do this is Operating Leverage (OL).

Operating Leverage (OL) is a measure of the relationship between the rise in profits and the rise in revenue in a business.

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It’s essential to dig deeper into the reasons behind an OL of less than 1.0. For example, an increase in overhead expenses or a decrease in gross profit margins could be to blame. If the issue is a change in product mix or a rise in after-sale support, it’s crucial to take corrective action to ensure your business is operating at peak performance.

Operating Leverage is an excellent tool for business owners to keep their businesses operating efficiently and effectively. If you’d like some help in applying the OL metric to your business, don’t hesitate to reach out to 6 Cylinder Success® for some friendly, free assistance.

At 6 Cylinder Success®, our goal is to help business owners achieve profitability and operate their businesses efficiently. With our business advisory, profitability before growth, and turnaround services, we have the tools and expertise to help you take your business to the next level.

So if you’re looking to maximize your business profitability and operate at peak performance, get in touch with us today to schedule a consultation. Let us help you deliver profitability to your business!

 

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