BUSINESS KILLING MISTAKES #16 – YOUR SMALL BUSINESS IS NOT MAKING BIG PROFITS – 6 STRATEGIES TO FIX THAT NOW

Just because you run a small business doesn’t mean you have to settle for small profits. Start generating more money immediately – more profit, income, and earnings – using these six strategies. 

START TURNING SMALL PROFIT MISTAKES INTO BIG PROFIT RESULTS IMMEDIATELY

Yes, these are tough times, and every part of almost every business is getting squeezed – especially the area of profits. Too many small business owners are taking the wrong approach or settling for “that’s just the way things are.” Or worse, believing, “If we can just make it through this crisis, things will get better.” Tell that to the frog that boiled to death because they didn’t know the water was getting hotter. Instead, don’t retreat or settle. Take on the challenge of bigger profit making by being smarter than your competitors and learn how to generate more net income immediately. 

So many clients, especially new ones, have asked us, “What can we be doing right now to make more money – especially profits?” In this article, I will share a half dozen powerful ideas gleaned from the book Entrepreneur to Millionaire that can be the difference between surviving and thriving. Make sure you and your team read through these strategies as we have proven they work with thousands of different clients of all types and in all sizes of companies. 

BIG PROFIT MISTAKE THAT LEADERS ARE MAKING

As already mentioned, too many business owners are accepting poorer monetary results from their company right now. However, that thinking isn’t new; it’s actually old. Most people who run small businesses (under $10M) have been taught that a small business can’t or shouldn’t generate huge profits. 

Is making a lot of money from your small business wrong? Is it cheating?

A fair price for a fair service, right? Bull spit!

What government agency determines what a fair service is? What law office dictates what a fair price is? Are you following the same old idea of “add up all your costs and add 20% to determine your price”? After you read Chapter 8: Tiered Pricing Strategies in the book Entrepreneur to Millionaire, I hope you will never rest your business success on the flawed “cost plus” pricing model again. What does determine how much money your business should make and keep?

How much money your business earns should be determined by the value impact

your offerings have towards your client’s and customer’s businesses.

SIX PROFIT CREATING AND MARGIN PROTECTING STRATEGIES TO IMPLEMENT NOW

Here are six powerful methods to scale profits that we have implemented over the last 20 years that you can quickly or easily apply in your firm. And most importantly, they don’t cost a dollar or more than an hour to execute. 

1. Package your offerings into “value added bundles” to sell more for less effort (lower cost of sales = more profit)

Example – value meals, PC computer system, phone/Internet/TV bundles, etc.

• Walk away from 50% of the opportunities in your sales pipeline (lower sales expenses = more profit)

Sales pipelines ALWAYs have dead deals, zombie deals, and non-decision deals that you should stop pursuing (no matter how much your salesperson cries). Use the “What has the prospect done in the last 30/60/90 days?” as a test to determine if a deal is moving forward or not.

• Stop any marketing program/efforts that you cannot link to creating high-quality leads (lower marketing expenses = higher profits)

If a marketing program produces a lot of activities, but you can’t link it to leads, then why are you doing it? Are you doing it for “Brand Awareness”? As an ex-Chief Marketing Officer of a billion-dollar tech company, I can name hundreds of brands I’m aware of, and I would never buy what they offer – no matter how much they “social the media”.  

• Start partnering to leverage their marketing to generate more clients for free (no marketing or sales costs = higher profits)

Partnering, as explained with examples in Chapter 11: Partnering for Demand, is a powerful way to get new clients to come to you. However, you have to be a great partner in return and offer something of compensation – it doesn’t always have to be money. How powerful is this concept? My firm will have potential partner meetings and conversations with 5-7 companies just this week. Let us know if you want to partner!

• Stop selling low margin business – set a threshold that if the margin is not X, don’t sell it (stop losing money = higher profits)

This idea can seem counterintuitive unless it’s a demand-creation strategy versus a standalone offering. As I discuss in the book, there are times you might lose money on offerings (think losing millions with Costco hot dogs or Sam’s roasted chickens) if it leads to more and higher profit business. 

• Eliminate offerings that you are currently selling that don’t produce specific profit levels (lower expenses = higher profits)

This one might sound like #5, but the difference can be when you are custom pricing out a service or offering versus a fixed-price product. Most companies offer and sell things they shouldn’t anymore – look through your offering portfolio and ditch the deadbeats. If you have “boat anchor dragging” profitability with some products or services, then jettison them as the margin is probably not covering the costs. 

STOP Did you just skim or speed read through those six strategies?  Or, are you like our most successful clients who print these pages off and then go through each concept with their team, discuss, and implement? 

Remember it’s not what you know – it’s what you apply – that creates success!

What is the impact of thinking, believing, or settling for small profits?

Not following these profit-producing strategies as well as the hundreds of other ideas and methods in the book Entrepreneur to Millionaire can be quite damaging to your business. Not only the money that is being lost should cause you concern, but also the time wasted, the resources misallocated, and the morale that is eroded.  And imagine if your competitors are following all these ideas and you’re not – you’ll be left behind to just work harder and hope more.

WHAT YOU JUST LEARNED

You now know a half-dozen powerful and corporate-tested ideas to produce more profit for your company immediately. There is no excuse for not following all of them. In addition, use these ideas to help drive future strategies and new business direction. Whether you’re a big company or a small business, stop settling for small profits. And don’t use the excuse of “These are tough times,” believing that soon the storms will be over. There will be more storms but let your competitors worry and stress out, not you and your team.

ACTION AND URGENCY

1. Get the book Entrepreneur to Millionaire (E2M™) and start reading (and listening, also.) Content on the first few pages will start to change how you think about your business, profit-making, and success. Every chapter is designed to teach you how to make money without spending money – that’s the fast track to big profits.
2. Assign someone in your company to be the project manager to implement the E2M™ Roadmap in your business
3. Talk to other CEOs and leaders who are implementing the E2M™ methodology in their company – maybe even join a small E2M™ SWAG group with them.
4. Let us know what help you need – besides the powerful and proven E2M™ methodology, we have the templates, tools, and resources to help you start scaling your profits from our very first conversation.