Almost 1 in 3 UK SMEs did not make a profit last year*. The encouraging part is that the gap is usually smaller than it feels, and small moves make a large difference. A 1% price rise, a 1% volume increase and a 2% cost reduction on a £10m business can be worth around £231k in cash, £257k in profit and a £1.8m valuation uplift*. The skill is knowing where to push, and that is exactly what the seven levers give you.
That is the part most owners can miss. The instinct is to chase more sales. Volume matters, of course, but it is only one of seven levers that quietly run the financial performance of your business. With a little focus on one or more of them, you can directly improve your cash flow, your profitability and what your business is worth. There is no smoke and mirrors here, and nothing especially difficult to do. The trouble is that most owners never stop to look at how the financial side really works.
One thing to hold in mind before we start: these levers do not work in isolation, they pull on one another. Winning more volume can lift profit, but it can also push up your direct costs or stretch your debtor days. Dropping price to chase sales can shrink margin faster than the extra volume makes up for. The gains are real, but they compound and offset in ways that are easy to miss when you look at one lever at a time. That is why it pays to look at them together.
So let us break it down. The first four levers sit on your profit and loss, so they shape your profitability and your cash flow directly. They also have a big effect on your valuation, because most businesses are valued on a multiple of their earnings.
1. Price
Can you put your prices up? Even a 1% increase can have a surprising effect on the bottom line. The fear of losing customers by raising prices is real, but it is usually unfounded. It comes down to the value people feel they are getting.
Tip: look at your margins by product, by service line and by customer, so you can see which sales make you money and which do not. You need to know your break-even points. Then look beyond gross margin. Some of your real costs sit in overheads but genuinely belong to specific customers or products: the ones who need more of your time, pay slowly, or demand more of your team. Load those in and the true profitability of a customer can look very different from what the top-line margin suggests. That is often where the surprises are hiding. A fractional CFO does this every week, and most of them rather enjoy it. The findings should feed straight into your sales and marketing plan. It is entirely possible to make more profit from less turnover.
2. Volume
Selling more can grow your business, but do not stop there. The real question is how much of every extra £1 of revenue turns into profit and into cash in your bank account, and when.
Tip: build a sales and marketing plan with a budget, and tie it back to your overall strategy. Review and adjust it regularly so your growth stays sustainable rather than the team just being busier.
3. Direct costs
This lever puts the spotlight on your gross margin, and it matters most to businesses with direct costs, such as manufacturing and construction firms.
Tip: revisit your purchasing arrangements and negotiate better terms, whether that is bulk discounts, early payment discounts or reduced freight. It can also be worth teaming up with other businesses to buy together. Pooling your volumes can unlock discounts none of you would reach alone. Strong supplier relationships matter, but that does not mean you cannot ask the question or look at alternatives. It is also worth reviewing your direct workforce using simple measures such as utilisation, overtime, rework, complaints and downtime, so you can redeploy people or cut overtime where the data supports it.
4. Overheads
This one sounds obvious, but we almost always find costs that have quietly crept up over time.
Tip: someone needs to go through the overheads line by line. Office wages, communications, insurance, utilities, freight and advertising are the usual places savings hide. Even small reductions add up over a year.
The last three levers sit on your balance sheet and are known together as working capital. They have a big effect on your cash flow, and therefore on how much funding you need. Many businesses can avoid taking on more debt, or pay down what they have faster, simply by shortening their cash conversion cycle.
5. Debtor days
This means improving how quickly your customers pay you.
Tip: review your credit control policy and your payment terms, and manage customers with a poor payment history closely. Look at who chases overdue invoices, and when. Tightening terms and chasing payment needs careful handling, so you protect the customer relationship while you protect your cash. A fractional CFO can steer on how to position these conversations well.
6. WIP days
This means reducing how long work or stock sits before it converts into an invoice, and then into cash.
Tip: for project and service businesses, the gap between doing the work and billing for it is often where cash gets stuck, so tighten the time from delivery to invoice. For product businesses, introduce a stock-take process if you do not have one, then review the results for slow-moving or obsolete lines that may need discounting to turn them back into cash.
7. Creditor days
This means taking a little longer to pay suppliers, without damaging the relationship or risking supply.
Tip: talk to your suppliers about your payment terms. It is simply a matter of asking. They may say no, but they may also value your business enough to say yes.
Small shifts, large impact.
See how this works in practice. You can watch a short walkthrough of this exercise run on a set of numbers, then book a call to see how we could run this exercise on yours. That is the moment it stops being a general idea and becomes your numbers, your levers, your biggest opportunities.
See how leading businesses are improving profitability. Watch the insights video.
This is the kind of work a fractional CFO does day in, day out: knowing which levers to pull, by how much, and how they affect one another. The CFO Centre is the world’s number one fractional CFO provider, with 350+ CFOs in the UK and 750+ across 18 countries worldwide. If you would like help bringing these levers to life in your business, we can have a confidential conversation today.
Source: *BVA BDRC SME Finance Monitor, 2025.
*These figures are hypothetical and for illustrative purposes only, and do not reflect any specific business.