Most business owners would like to increase their net profit, but very few know where to start. Do you put your prices up, and risk losing customers? Do you cut costs, and risk providing an inferior product or service? Or do you keep doing what you are already doing and hope for the best?
Alternatively, you could make small improvements in a few key areas to give a BIG result.
Maths challenge for you, What does 1+1+1 = ?????? 3? Think again, Below I will show you how very small 1% changes make a lot more than 3%.
1% Increase in sales price
When we ask business owners if they could raise their sales prices by 10%, the general answer is yes, but risk losing many regular customers in the process.
But could you raise your prices by 1% without losing any customers? The answer is highly likely to be yes.
1% Increase in sales volume
When we ask if they could increase their sales volume by 10% the usual response is yes but with increased expenditure on marketing.
But could you increase your sales volume by 1%? Again, the answer is always yes.
1% Reduction in costs
Ok, so final question. Could you reduce your costs by 10% without losing the quality of your product or service? Perhaps not?
But could you reduce costs by 1%? Yes?
Ok, so you could easily increase your sales prices by 1%, your sales volume by 1% and reduce your costs by 1%. What will the effect on your net profit be? 3% increased profit? Think again
Take David for example, he came to us with a profit of £50,000. By challenging him to make these very small improvements he increased his profit by £2,000, which is 5%. So you can see that 1+1+1 does not always equal 3!
If you would like to do the same, please contact us for a free consultation.