Profitatbility

Someone said to me once that you only need to do two things to succeed in business; make more profit and spend less. Of course that is a gross over-simplification but it does hold a grain of truth. The key qiestions all revolve around how to make more profit and how to spend less. The forum divides here into two broad headers. One relates to what we can do in these troubled times to ake sure we sell more and the other invites conversation on the subject of efficiency, saving time and getting value for money.
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nhcbr900
Site Admin
Posts: 21
Joined: Sun Mar 22, 2020 12:22 am

Profitatbility

Post by nhcbr900 »

Profitability of our offerings; what makes us money and what costs us time? Using some of this 'dead time' to analyse the return we get for our efforts may turn up some surprises and point us to what aspects should receive the maximum effort to push while others could be left on the sidelines, or even dropped completely.

nhcbr900
Site Admin
Posts: 21
Joined: Sun Mar 22, 2020 12:22 am

Re: Profitatbility

Post by nhcbr900 »

I am sure that like many small businesses, I am guilty of not charging out all the time that I should or could. This has a direct impact on profitability and earnings, so now is a good time to start identifying the areas in which such losses occur. For example, do you offer "Mates' Rates" to certain people. This is not a bad thing in itself, but a couple of questions could well be asked when considering whether to apply that rate or not.

Does the "Mate" reciprocate with a similar rate when your roles are reversed? If not, I would suggest that the mate is not a mate at all. Real mates understand that you are in business and if you don't earn, you don't eat. Real mates would insist on paying the going rate under those circumstances, especially if there is no possiblity of reciprocal discounting. Not everyone is in business after all, so some don't have the ability to respond in kind.

Are your "Mates' Rates" too generous? Sit down and work out exactly how much you can offer by way of reduction and what that is going to buy you. Some examples of valuable trading tokens that can be gained in exchange for a favourable deal:
  • Repeat business, more sales at reduced indiviual profit can still add up to greater overall profit
  • Enthusiastic promotion through their network
  • Similar terms when they are selling to you
  • Glowing testimonials to use in your promotional material
There are, I am sure many more specific items that we can add to our list. You are probably cursing me for missing out your favourite right now. The thing is that even "Mates' Rates" should leave some profit in the deal for us, and most importantly, should be given in exchange for something rather than as a favour.

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