Lose Weight and Grow Your Business
♫ Thursday, January 19th, 2012
Lose weight and grow your Business
Is one of your goals to “lose” some excess weight? Why not have the same goals for your business?
When you hear people talking about sales goals, they’re almost always referring to gross sales. “I want to do 0,000 in revenues. I want my company to grow to million, million, etc.”
But which is more important, sales or profits? Shouldn’t the goal be to increase profits? The money you keep after paying your expenses? Doubling your revenues doesn’t equate to doubling your profits, does it? In many cases quite the opposite happens. Sales may increase, but the profits lag far behind.
Perhaps a better idea is to “trim” your business – stop calling on the unprofitable and time consuming accounts – so you can reduce your costs and dramatically increase your profit margins. This in mind, let’s look at company XYZ, Inc.
XYZ Inc. is a Mfg Rep Company. It does nearly million in total sales. The manufacturers pay commissions of 30 percent, so the company earns .8 million. The company pays out .5 million to its 30 employees and other expenses, leaving a 0,000 net profit. XYZ Inc. has nearly 600 accounts, but the bottom 200 accounts don’t do much business with them. They do, however, take up a lot of the sales and service time, effort and attention.
Doing an analysis, XYZ Inc. discovered their 200 smallest accounts spend only 0,000 annually, but take up more than one-third of the sales staff’s available time.
Considering the implications they came to these conclusions:
If they stopped calling on these small (the bottom third) accounts, sales would drop to .5 million Commission income would drop to .65 million from .8
However, they could reduce their employee count and related expenses by 1/3, or million (a 0,000 savings).The result would be a 0,000 increase in profit to 0,000. “Trimming” the business was step one.
Step two was to have the entire company focus their efforts toward improving the quality of service to their best, or their “A” Class customers. This meant the team could easily keep their best customers very happy, turning them into raving fans who referred additional business to the company. The bonus was that the prospective customers referred by the “A” Class customers were just like them – also “A” Class. They were also able to find additional products and services they could sell to those “A” Class customers.
The sales team identified their “ideal customers,” their qualities, size, values, culture, etc. – customers they wanted to do business with, and then went after them. The attitudes and morale of the organization changed. The salespeople were making more money, and everybody was having more fun because they were spending their time, energy, and effort serving their “A” Class customers. And, with their new found free time, they are able to look for new opportunities and clients with the same profile as their “ideal customers.”
XYZ Inc. can now set its sights on growing the company to million, and then million in sales, by doing business with only the “best” customers, with much higher profit margins.
So, how can you reduce some excess weight in your business this year?
Here are the three things we just went over:
Trim your customer base. Stop calling on those who take up lots of your time, are hard to deal with, price shop, etc., and don’t do much business with you anyway.
Create a profile of your “ideal customer,” and then find more clients who fit that profile.
Give your best customers a consistently incredible, “wow” level of attention and service.
“Under commit and over deliver”
James Burgess is the Founder & Managing Director of Synergen-X Management Consulting Inc. as well as the Founder & Lead Flight Director of DASH-10: Entrepreneur’s Flight Club.
Having grown up in a small business household, James respects the challenges faced by small business owners everyday. His father’s legacy is apparent in the Toronto skyline. James’ wish is for his daughter to experience his legacy and while that won’t be towers rising out of downtown Toronto he hopes it will be thousands of business owners made better off by their involvement with Synergen-X Management Consulting Inc.
James’ passion is for every business owner to live the business ownership experience they hoped for. Many of our clients tell us that James’ passion for their business is often times greater then their own. His energy and drive to help our clients gain control of, and grow their businesses is a result of his dedication to independent businesses.
Article from articlesbase.com
Paul Chaderjian interviews Armenian National Committee of Hollywood (ANC Hollywood) activists Paul Seradarian and Rostom Sarkissian about the August 28th Small Business Tax Seminar, organized in collaboration with the office of the California State Controller John Chiang and the sponsorship of the Armenian-American Chamber of Commerce-Little Armenia Chapter, to educate and equip small business owners to succeed in the current economy. The seminar will cover a broad range of topics including the American Recovery and Investment Act of 2009, regional business opportunities and incentives, employment and payroll taxes as well as income, sales and use taxes. WHO:Armenian National Committee of Hollywood Office of California State Controller, John Chiang Armenian-American Chamber of Commerce (Little Armenia) Supporting Business Organizations (see list below) WHAT: Small Business Tax Seminar WHEN: Friday, August 28th 8:30 am Registration 9:00 am 1:00 pm Small Business Tax Seminar WHERE: Karapetian Hall 1614 N. Alexandria Avenue Parking available at church parking lot TO RSVP: Call the ANC Western Region office at (818) 500-1918. SUPPORTING ORGANIZATIONS: Thai Community Development Center; Thai Chamber of Commerce; Greater Los Angeles African American Chamber of Commerce Regional Hispanic Chamber of Commerce Community Redevelopment Agency of the City of Los Angeles; Hollywood Chamber of Commerce ANC-Professional Network and Consumer Action. The RSVP form is included in the …
Video Rating: 5 / 5