So we want to increase profits. So how do we do that? The difficulty with that question is that profits is a result and not something that it can be controlled on its own. Hi, my name's Gordon D’Silva on this a short video, I'm going to just help you understand. The elements of profit. I'm not trying to teach grandma to suck eggs.
I mean, you know, the old phrase of you know this stuff, but I just want to break out the intricacies of a business model. And I want to start the process on this video and we'll carry on a series of videos just so that these can be on manageable sides. And on this video, when you talk about, you know, the makeups of profits and profits are made up of.
Sales of course, and expenses really simple right? So you maximize sales and you minimize expenses. But unfortunately it is much more complex than that because sales is something you can't specifically manage on its own. There are various components. For sale and there's various components of an expense or expenses.
Let's take on this video. We'll talk about expenses. In the next video we'll solve, stop touching into sales, but on expenses. There are some expenses that are more fixed than others. There are some that are very variable, so some very directly with your sales. So for example, if you're selling a product, you've got to make a product or byproduct and then sell it.
So the more you sell, the more you're going to buy or make, right? So there's a direct link. Those are costs of sales, right? Those are expenses that vary very directly with sales. Then you've got a whole load, more variable costs. These are costs that do bury with sales or activity. Things like your stationary.
Things like your telephone bills may increase with the trouble with what stuff your travel costs may increase as you travel more. However, there is probably more and more things that are more variable as we think about it, because even rent, you know, in the old days I was taught that rent was a fixed cost, right? It doesn't change. However, if you double yourselves, chances are you might need a bigger office space. You might need more room, and you may need to move the office building. That's moving costs. So if you just take my point, that expenses, while they need to be managed, they're not always fixed.
And so they're not always easy to manage. You've got to sort of think ahead and think, well, if I doubled my sales by double my sales volume. Yeah. What needs to change is the fact we need to change. Do my processes need to change? Do I need more computers, more desks? And then of course, more people, uh, who's managing them, who's hiring them.
All of those things become very dynamic. So you begin to see. That your model for increasing profits is becoming increasingly complicated, and that's already one-on-one too. To establish on this video, on the next video, we're going to go deeper into some expenses and then maybe even touch on sales on a future video.
If you want to be tagged into the neck, the series of these videos to help understand the mechanics of a business. Please just send me a message or click on the link on and log in or something and I will make sure that you get tagged into the series I'm going to be doing on increasing profits.
Okay? That's it for now. This is Gordon D’Silva wishing you well. Don't forget, if you need help, reach out. If you don't, you're doing great. All the best. Goodbye.
