Upcoming Events
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Speaking Engagements
Beating the Odds in Any Economy
September 9th
6:00-8:30 PM
Marin Country Club
More Info
Teleseminars
Winning Sales in a Competitive Market
September 4th
11AM-Noon PDT
More Info
How to Always Make a Profit
September 16th
11AM-Noon PDT
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Managing by the Numbers
October 2nd
11AM-Noon PDT
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Workshops
- In Novato
The One-Minute Budget
September 18th
8:30-11:30 PDT
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Increase Your Cash Flow . . . NOW!
September 18th
12:30-3:30 PDT
More Info
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| Client Testimonial |
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"Before working with Vicki, I looked 30 days ahead; or, just had some rough idea in my head of where I figured my business stood. Now, with my budget and cash flow spreadsheets, I can forecast the entire year, and know exactly when I have enough work and when I need to go and sell more. Truthfully, I'm not sure I could have survived last year without a major financial crisis had I not consulted with Vicki. Now, thanks to her, I know my business is headed on the right course and I know how to keep it there."
Bill Darrah
Bill Darrah Builders, Maui, HI
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August 2008
Profit Primer
Tools for organizations to build strong companies! |
Hi Vicki
 Are you among the thousands of small to mid-sized businesses worried about slowing sales and an eroding bottom line in today's changing economy? After working with businesses like yours for twenty years, I have found the answers to these kinds of challenges, and in this month's newsletter I will share with you some simple and clear ways that you can start to effect a change in your bottom line. Read more below. Wishing you much success and an abundant bottom line! Best regards, Vicki |
Improving Your Bottom Line
There are only two ways to affect the bottom line profitability of a company: you must increase revenues or decrease costs. And, there are only two ways to do either of those. To increase revenue, you must either increase volume, or increase your prices/markups. To reduce costs you must either be more efficient in your production (cost of goods sold), or cut your overhead (cost of running a business). It is as simple as that.
Start by looking at your records to determine which of these four areas is most directly contributing to your profits declining.
If the problem is declining sales volume, then ask yourself "What's causing the drop?" In the cycle of business there is always something that comes before the sale - marketing, bidding, and closing the sale. Is there something you're forgetting to do? Carefully re-examine your sales process. Is there something you need to do to get sales back on track? Be realistic about how long it may take to do that.
Are you one who says, "It's the economy and I can't do anything about that!" That's simply not true. While numbers may be down, people continue to make purchases. Your job is to make sure you're the one they go to when they're ready to buy. Focus on differentiating your business from the competition. Make sure your marketing reflects your focus.
CHALLENGE: Tell the truth here - how much time have you really spent marketing your business? Do you have a lingering belief that business should simply come to you? Are you asking for referrals? Or are you too "shy?" Are you making the extra effort to be your client's preferred vendor? Are your clients raving about you? Shouldn't they be? Is there something more you could be doing that would get them to spread the word about you? If you go to a great restaurant or a movie, you tell everyone about it. Are your customers telling other people what's wonderful about you?
Before you blame the economy, remember: you are part of the economy! Are you doing all you can to make your business's operation as strong as it can be?
Besides increasing volume, the second way to add revenue is to increase pricing/markup. When was the last time you adjusted your prices? Are they within the range of what the market will bear? Price resistance comes more often from those who set prices than those who pay them. Top sales people report that price is rarely the prime driver in a sales transaction - value is. Are you creating enough value for your customers? Is there something you could do to increase value that would allow you to increase your prices (and make more revenue!) at the same time?
Once you have assessed the revenue side of the equation, then it's time to address the cost side (remember - the only two ways to increase the bottom line are to increase revenue or decrease costs). The two ways to reduce costs are to increase production efficiency (thus reducing your cost of goods sold), or cut your overhead costs.
Increasing production efficiency is a wonderful way to reduce costs. And, it is often a longer-term solution. If you are in need of immediate results, look at your overhead costs to determine where you can cut costs there.
First, determine what costs in overhead are absolutely essential. Many things you may think of as "must-haves" are actually luxury items - like meals & entertainment, small tools and travel. Eliminate or reduce those costs and others like it as much as possible. Then, look to see where you can re-negotiate more favorable contracts. Phone plans, leases and support services are all supplied by companies who want to keep your business. See how far they're willing to go for you. You may be surprised.
Next, look at your staffing costs. No one wants to implement cutbacks, but if you're overstaffed, you're endangering everyone's security. Salaries are usually the biggest overhead expense and the place where it is hardest for business owners to make cuts. Truth is, it is the most critical place to look if you are in deep financial trouble. Some ways to 'ease' into this would be reducing people's working hours (assuming they are hourly), consolidate positions where possible, and ultimately eliminate any jobs not absolutely essentially to the running of operations. Too hard to do? Which would you rather? Let a few employees go now and keep the business running - or keep everyone on staff and then have to shut the entire company down when you can't sustain it? Know when you have to make this call and make it!
Whether it is increasing revenue or decreasing costs, be clear on 'how' you will do it. Have a written plan listing what actions your company will take to get you on track with a satisfactory bottom line. Then manage that plan to ensure it stays on track.
In summary:
A) Assess the sales slump - is it temporary? What is the cause of the slump? Tell the truth about what the 'source' of the slump is. Then, figure out what you can do about it.
B) Look at costs and determine where they can be reduced. Are there ways to increase efficiency, thus reducing production costs? What costs can and need to be cut in overhead?
C) Put your plan in writing.
D) Manage the plan to keep on track.
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Get Into Action
If you would like some solid methods for increasing your sales, attend a one-hour teleseminar "Winning Sales in a Competitive Market" I am doing on September 4th at 11:00 a.m. PST with Chip Doyle of Sandler Sales - a renowned expert in the area of sales management.
If you would like more information on how to consistently make a profit, attend my one-hour teleseminar, "How to Always Make a Profit," on September 16th at 11:00 a.m. PST.
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Ask Vicki!
Got a question you'd like answered? An issue you need resolved? Email Vicki and she may include it in her next newsletter.
Email Vicki at: info@suiterfinancial.com
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Suiter Financial Systems
250 Bel Marin Keys Blvd. C2
Novato, CA 94949
www.suiterfinancial.com
info@suiterfinancial.com
415 884 0288
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www.suiterfinancial.com 
