What is a key factor for increasing EBITDA in a business?

Increasing sales is a critical factor for enhancing EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) because it leads directly to higher revenue, which in turn allows for greater earnings before non-operating expenses are considered. When a business successfully increases sales, it generates more income from its core operations. This additional revenue can improve overall profitability as long as the increase in sales does not incur a proportionate rise in costs.

While reducing variable costs, raising product prices, and hiring more sales staff can also contribute to improved financial performance, they are often contingent upon the effectiveness of the sales strategy. If sales increase, the company can leverage existing infrastructure, resulting in better economies of scale that further contribute to EBITDA growth. Thus, the most direct and impactful way to increase EBITDA is by focusing on boosting sales, which fundamentally drives top-line growth and enhances operational efficiency.