Ep. 173 - The Profitable Equation: Efficiency, Margins, Pricing, and Productivity
Improving the businesses bottom line is always a nice thing to do. Usually, the strategy to do so is increase sales. But when you’re already working hard and long hours, more sales means more work. More work means more hours and less time at home with your spouse and family. How much more can you handle?
What if we can show you how to find more money within your business without you having to go chase more sales? No, it’s not magic or accounting fraud, it’s just basic practical process many businesses don’t do because it’s not fun.
But the payoff is huge. You’ll find more profits to invest into hiring, upgrading equipment and software to make your business more efficient, give you more time, and have the ability to handle more sales without driving you nuts.
Go through this process and you will find more money to put into the bottom line.
Oh, and you’ll have more freedom to invest with your spouse and family.
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Key Takeaways:
We’re going to show you how to find more money in the business
Allows you to invest more into the business. Hire more help, upgrade equipment/software.
Make the business more efficient and profitable to handle more work
But will free you up to invest into your relationships
Why do you work so hard in the business? The mindset is more sales is the answer
More sales = more work if you don’t have more help and capacity to handle the increase
Healthy net profit margin = 10-15%
To find more money, start from the top of the P&L statement and work your way down.
Price- Raise it, bundle another product or service on the same transaction
Cost of goods- Finding lower cost alternatives with suppliers, is there volume discounts, terms of payment discounts, efficiency in labor.
Fixed expenses- What’s the return on investment. Is that subscription serving you well, can you cut down on some of the travel, lower cost provider, are you even using the service?
We tracked every penny for a month on a personal level and were surprised where the money went
Increase performance- Increase sales close rates, PPC, speed of service, less mistakes, less returns, open rates
