Double Your Profits By Making Small Changes

double your profuts within your business

Double Your Profits By Making Small Changes

It is very possible to DOUBLE YOUR PROFITS by making SMALL changes to your REVENUE SALES, MARGINS and COSTS.

If YOU have read some of my other articles on this site, YOU would have read my comments about the top 10% who achieved huge profits and huge success in their businesses and the remaining 90% who are running mediocre business with mediocre profits. In my articles, I have also made several references to SMART BUSINESS THINKING and SMART BUSINESS ACTIONS and have said that if the 90% want to migrate to the top 10%, they have to change their THINKING and ACTIONS in their businesses.

In this article, I want YOU to THINK that through SMART BUSINESS THINKING and SMART BUSINESS ACTIONS, YOU could increase your NET PROFITS dramatically by only making small changes to your business.

I know from experience in my own businesses and working with other businesses that relatively small changes can be made that could literally DOUBLE your NET PROFITS, through doing the following:-

  • REVENUE SALES be increased by 20%
  • MARGINS be increased by 8%
  • COSTS be decreased by 10%

Let me give YOU an example for an average business with £125,000 REVENUE (ex VAT), GROSS PROFIT of 50% or £62,500 and COSTS of £40,000.

A PROFIT AND LOSS SUMMARY for this business could look like this:-

  • REVENUE SALES   £125,000
  • GROSS PROFIT         £62,500   (50%)
  • COSTS                        £40,000
  • NET PROFIT              £22,500   (18%)

But if YOU made the changes that I highlighted above, the PROFIT AND LOSS SUMMARY could look like this:-

  • REVENUE SALES   £150,000
  • GROSS PROFIT         £81,000   (54%)
  • COSTS                        £36,000
  • NET PROFIT             £45,000  (30%)

Here the NET PROFIT MONEY is doubled to £45,000 and the NET PROFIT PERCENTAGE has risen 66% from 18% to 30%. Hopefully, YOU can see that a BIG CHANGE to the NET PROFIT has been made through reasonably small changes to the BUSINESS NUMBERS.

Surely £45,000 is MUCH BETTER than £22,500!

But, I hear YOU say that YOU could NOT make these changes in your business, small as they maybe. These changes could be easier than YOU THINK, so please read on!

HOW TO DO THIS

If YOU have read some of my other ARTICLES on this site, YOU would have read that I have said YOU should KNOW and UNDERSTAND YOUR TARGET CUSTOMERS COMPREHENSIVELY. This means KNOWING and UNDERSTANDING them MUCH BETTER than YOU do now  –  MUCH BETTER!!!

Through this KNOWLEDGE, YOU will be to achieve the following:-

  • YOU will able to TARGET your TARGET CUSTOMERS much better with your MARKETING, grabbing more CUSTOMERS and making them BUY MORE from YOU.
  • YOU will be able to BUILD A BIGGER ARMY OF LOYAL CUSTOMERS who will return time and time again to BUY MORE.
  • YOU will be able to provide MUCH BETTER PRODUCTS that will provide BETTER HELP and BENEFITS for your TARGET CUSTOMERS.
  • YOU will be able to provide MUCH BETTER CUSTOMER SERVICE that will EXCITE and IMPRESS your TARGET CUSTOMERS.
  • By providing BETTER PRODUCTS and BETTER CUSTOMER SERVICE, YOU will be able to increase your PRICES modestly.
  • By EXCITING your CUSTOMERS, YOU will create WORD OF MOUTH, the most powerful MARKETING TOOL in business, thus reducing your MARKETING COSTS.

All of the above will GROW your REVENUE SALES and GROSS PROFIT and help to reduce some COSTS. In addition to this, every business owner should do a COMPREHENSIVE AUDIT of their COSTS every 3 months to see where SAVINGS and EFFICIENCIES can be made  –  most businesses don’t do this EVER!!  But, in my experience, any business could easily make 10% savings and probably more in their businesses.

Hopefully, this has convinced YOU that this possible.

YOU COULD DO EVEN BETTER THAN THIS

In my view, doing what I have described is the minimum anyone can do in their businesses –  I THINK much more is possible  –  I am talking about DOUBLING or TREBLING REVENUE SALES!!!

The WILL to MAKE THE CHANGES along with SMART BUSINESS THINKING and SMART BUSINESS ACTIONS is all that is needed. This will create the FOCUS to look at your CUSTOMERS, your PRODUCTS, your TRADING MARKET and EVERYTHING ELSE in your business and an AVALANCHE of possibilities will unfold to effect the changes that I have described here in this ARTICLE.

DO THIS NOW!!!

I want YOU to SET YOURSELF THE OBJECTIVE of:-

  • INCREASING REVENUE SALES by 20%
  • INCREASING MARGINS by 8%
  • DECREASING COSTS by 10%

And, DO IT NOW!!!

If YOU wish to discuss this further with me, please email at Robert@prestigebusinesscoaching.co.uk

Or please leave a comment below.

SMART BUSINESS THINKING & SMART BUSINESS ACTIONS!

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How Good Are Your Profits

How Healthy Are Your Profits?

How healthy is your business? Are your sales rising? Are your margins good? Do you have control of your costs? Are your profits growing?

If your sales and profits are growing then you should have a healthy business. But if your sales and profits are flat or are decreasing, then your business is not so healthy and you need to take action.

In such a situation, your business needs a complete re-think –  you need to re-think everything within your business, starting with FOUR major areas:-

  • Your Products
  • Your Customers
  • Your Margins
  • Your Costs
You should ask yourself questions about your products:-
  • Are your products matched exactly to the needs and wants of your customers?
  • Do your products bring real benefits to your customers?
  • Do your products make the lives of your customers better?
  • Are your products priced right to give value for money but also a good margin?
  • Have your product sales dipped in the past 12 months and, if so, by how much and why?

You need to sell a high number of your products to generate high sales that keep growing, but you will only achieve that if your products match exactly the needs and wants of your customers.

You should ask yourself questions about your customers:-
  • Do you understand fully who your target customers are & everything about them?
  • Do you have an army of customers that is growing?
  • Do your customers return to buy more from you?
  • Do your customers tell their friends about you?
  • Do your customers get a good customer experience from your business?
  • Has your customer numbers dropped in the past 12 months and, if so, by how much?

It is imperative that you understand who your target customer is and you understand everything about the needs and wants of that customer –  then you should be able to sell them the right product and achieve a large army of customers and keep growing that army.

You should ask yourself questions about your gross profit margins:-
  • Is your margin sufficient to pay your costs and to provide a good net profit?
  • Are your selling prices lower than the equivalent charged by your competitors?
  • When was your last selling price increase?
  • Are you paying too much for your products?
  • Has your margin slipped in the past 12 months and, if so, by how much?

It is important to understand how your margin affects your net profit –  it must be large enough to comfortably pay all your costs and to give you a high net profit.  Are your prices too low and if you were to increase them, would sales slip?  In my experience, if you have a strong product offering, price increases should not affect sales.

You should ask yourself questions about your costs:-
  • Do you have a clear understanding of all your costs?
  • Are you as efficient and lean as you could be?
  • Do you know which costs have increased over the past 12 months, and by how much and why?
  • Are there purchases being made that could be trimmed or eliminated?

It is very easy for costs to creep up and to not be noticed. You should look at each cost and analyse each one and see where quick savings can be made.

From experience, doing this exercise can often generate significant changes to the health of a business and its profit. Even just a 10% increase in sales, a 2% increase in margin and a 10% decrease in costs can collectively have a dramatic effect on the net profit, often adding as much as 40%  –  now that is surely worth having?

Have a think about this now!

This is a very quick snapshot of possible remedies for an unhealthy business, but if you would like some more advice, email me now: Robert@prestigebusinesscoaching.co.uk.

Or leave me a comment below.

THINK SMART, ACT SMART!

Do You Know Your Numbers?

When starting a business, for your startup, do your homework

DO YOU KNOW YOUR NUMBERS?

If you have ever watched Dragon’s Den, you may have noticed that many of the prospects fall down on their numbers when pitching to Peter Jones and company.  Those pitching for the Dragon’s money often cannot answer questions about their numbers such as their REVENUE SALES, their GROSS PROFIT MARGIN, their COSTS and importantly their NET PROFITS.

HOW WOULD YOU DO?

DO YOU KNOW YOUR NUMBERS?

Continue reading “Do You Know Your Numbers?”