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If You Don’t Know This, Your Business is Losing Money

If You Don’t Know This, Your Business is Losing Money

 

Sometimes as a business owner you can get so caught up in running your business that you may no longer have a good overview of where your business is most profitable.

 

I'm sure you probably know how much money your business is making overall but are you clear about how each of your specific revenue streams are performing?

 

If I asked you right now which product or service is the most profitable can you answer immediately? 

 

It you're not clear about how your business is making money, now is the time to find out.

 

It is possible that some of your products and services that require the most amount of time and energy are your least profitable.  Or, you may be ignoring a very profitable part of your business that requires hardly any work on your part.

 

Analysis may not be your favorite thing to do but it can be thrilling if you keep the end goal in mind.  You will discover where you're making money and increase your profitability by giving that part of your business more attention.

 

Not only that, you'll see where you can stop wasting time and money.  If that's not enough motivation I don't know what is.

 

Here are steps to get started.

 

1. For every product or service you offer calculate the profit each generates (total revenue minus total costs = profit).  You can use the totals from the last twelve months or another time frame that works for your business.

 

2. In addition to the actual costs, add in the average amount of time you spend to market and deliver each product and service.  Because time is another form of money.

 

3. Now comes the fun part.  Combine the information from steps one and two and identify which products and services have the highest profitability.

 

Once you know which of your products or services are the most profitable select the best two or three (or only one if it is significantly more profitable than the others) and focus your marketing exclusively on your choices.

 

It's that simple.  Once you know what part of your business is the most profitable, put a laser like focus on that revenue stream.

 

Taking your focus a step further, find out what makes your most profitable products and services so attractive to your clients.  Is it the content, the packaging, the way it's delivered?

 

Once you understand what your clients really want, you can think about opportunities to expand or extend your most profitable products and services.

 

Another way to extend the focus is to pay even more attention to the clients who purchase your most profitable offerings.  You can do that by staying in touch, providing them with extra value, and delivering the highest level of service.

 

This is also a good time to seriously consider dropping the products and services that have a low profitability and require a lot of your time.

 

That will free up time and money you can use to increase the scope and scale of the marketing you are investing in your most profitable products and services.

 

Don't delay, schedule the time to find the source of strength in your business and concentrate on it.

 

The time that you invest to identify your most profitable offerings may be the best investment you've made in your business so far this year.

 





If You Dont Know This Your Business is Losing Money - To learn more about this author, visit Stephanie Ward's Website.

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David Barr
David Barr is the President of Venture Opportunities, Inc. David has been a professional business broker/intermediary since 1980 focusing on General Business Brokerage and Mergers and Acquisitions representing client transaction value from $400,000 to $20,000,000. Mr. Barr has handled the sale of over four hundred and fifty companies. David earned a university degree from the State University of New York majoring in economics and business. David holds the Mergers and Acquisition Master Intermediary and the Certified Business Intermediary designations from the International Business Brokers Association. He is also a Senior Business Analyst and a Texas licensed Real Estate Agent. For more information about David and Venture Opportunities, visit www.bizdealmaker.com. - Visit David Barr's Website

Anne Barr
Anne Barr has over 26 years experience in sales and marketing, six years as a franchisee. She has assisted over 367 business owners and purchasers to achieve their goals in career change, transition and exit strategy. She holds the designation of Certified Franchise Executive from the International Franchise Association, Certified Business Intermediary from the International Business Brokers Association and Board Certified Broker from the Texas Association of Business Brokers. Anne is active in professional organizations, networking groups and volunteers for non-profit entities. As owner/operator of four successful businesses, Anne has proven people skills and enjoys helping clients find the right "fit" in business ownership. Visit www.FranchiseOpportunitySpecialist.com for more information about me and my company. - Visit Anne Barr's Website

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David Acheson is the founder of DCJA Consultancy. DCJA Consultancy is a management consultancy business specialising in B2B sales consultancy. They offer bespoke and packaged sales consultancy including Sales Optimisation Review, Interim Sales Management, Sales & Marketing Review, 1:1 Sales & Management Staff Analysis, Management Training, Solution Sales Training, Creation of New Pay Plan, KPI's, run Customer Feedback Campaigns, assist with Recruitment, Coaching, Appraisals and set up Strategic Marketing Campaigns.  David spent his early career in accountancy and then moved into sales in 1982, working in Office Equipment, IT, Advertising, Training, Outsourcing and Consultancy. He has held many Senior Positions in SMBs and Global Organisations including Head of Sales Operations & Head of Business Development. His knowledge, skills and great experience of the Sales Industry has led to David making keynote speeches and running educational sessions to key businesses through organisations including The Chamber of Commerce and Business Link. - Visit David Acheson's Website

Leanne Hoagland-Smith
Are your sales where you want them to be? Will you be one of the few who achieves sales or business success or one of the many who have failed to change? Are you tired of being told you are like everyone else? Then you may find my first book on sales of interest. Be the Red Jacket in the Sea of Gray Suits, The Keys to Unlocking Sales available at Amazon or at http://www.processspecialist.com/red-jacket.htm. This book is a reflection of my no-nonsense approach to improving sales to overall business results. If you are truly committed to making sustainable changes, then I can help you secure a positive return on your investment because I focus on executable solutions not telling you the problems you already know you have. From training to corporate (group) coaching to executive one on one coaching, my approach is to assess, create awareness, build a goal driven action plan and then execute. The bottom line question is "Not do you or your employees know it, but do you or they want to do it?" Please call for a free strategy session at 219.759.5601. - Visit Leanne Hoagland-Smith's Website

Cheryl Matthynssens

Cheryl is a life skills coach, licensed Chemical Dependency Counselor and a 20 year entrepreneur.  Cheryl's dedication to achieving a life of balance led to her expanding her teaching from the simple managing of life's daily challenges to adding financial well being as well.  A direct marketer with DrinkACT, she is gaining ground in the online community with her concepts of making sure business owners, entreprenuers and employees have well rounded life styles.  She opened up a small affiliate site - The Balance Guide-  to help others find resources for mental and emotional well being.  Visit Cheryl's blog to see more of the diversity beyond business she has began offering online at www.thebalanceguide.blogspot.com

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