A principle function of any business is to make a profit, and it is necessary to also maintain cash flow to do this. However, it is easy to find ourselves focusing only on sales performance information (because this is easy to measure) without thinking about the profit generated from this.

The measures that businesses will usually look at are gross and net profit margins. Business owners will also look at net profit, which leads to dividend. But looking at the financial position at a more sophisticated level will provide information that can guide effective decisionmaking.

For example, the gross profit generated from completing 400 MURs per year in England or Wales is £11,200. There are no specific costs associated with the service unless a locum is recruited to support their provision.

What volume of medicine sales would be needed to generate this level of profit? It would probably be about £45,000 of sales (at retail price).

Which would be easier to achieve: seven or eight MURs per week or increasing weekly medicine sales by more than £850 per week?

 

The next step is to put these ideas into action. Finish by recording your learning outcomes.