In my last post, I pointed out the importance of time management and made the point that it’s the role of the leader of the business to push, push and push some more to keep the elapsed time between impulse and implementation to the shortest possible number of minutes.
Now I want to shift gears once again and talk about profit management and immediately make the point that the main motivating reason to be in whatever business you’re in should be profit.
If its not, you don’t belong in business. Yet as a consultant I find all sorts of people in all types of businesses who are not primarily profit motivated. They’ve got their priorities mixed up. Business decisions made with something other than profit as the prime consideration are almost certain to be bad decisions.
One profit related issue is pricing and I find that most business people under price their products and services. It’s my experience that price either isn’t or doesn’t have to be a very important factor in a consumer’s decision or the success of a business.
Personally, in fact, I like to be positioned at the high end of a price scale and have competitors focused on selling from the perspective of being cheaper instead of being better.
One of the most successful chiropractors I know is surrounded in his area by other doctors who charge considerable less then he does per typical treatment. Yet his practice is bigger and more successful than any three of his close competitors added together.
In my experience that’s not an exception that’s a rule of business. Almost every time I consult with a business one of the very first things we do is raise prices or fees. Sometimes the adjustment is pretty dramatic.
Price is the laziest and riskiest advantage to market with. Buying business with lower prices is relatively easy but keeping business obtained purely because of price is difficult. One way that most businesses can immediately increase profits is by increasing their prices. Most under price and wait too long to increase prices.
A second source of profit improvement directly linked to everything else we’ve discussed in this online course is doing more business with each customer as opposed to obtaining lots of new customers.
We’ll pick up with this huge money making concept tomorrow.