Top 3 Tips for Profit 2

The Importance of Profit

With Lead Business Advisor – Alan Short

Full Transcript

I want to talk to you about the importance of profit.

Here are three tips to make sure that your profit and your cash flow are improving.

Profit First

The first thing you can do to make sure that you’re getting profit in your business is take out profit from every dollar that you receive and put it in a separate account that you don’t use for your business, you use it for yourself.

This is a principle called Profit First introduced to me by Mike Michalowicz in his book Profit First.

Simple System

It’s a really simple system that I use in my business and I’ve 10X-ed my profit, while paying everybody exactly the same amount of money and nobody has felt that they’ve actually reduced what they were getting from the business.

Simple System

It’s a really simple system that I use in my business and I’ve 10X-ed my profit, while paying everybody exactly the same amount of money and nobody has felt that they’ve actually reduced what they were getting from the business.

I’ve been able to pay all my suppliers, I’ve been able to pay my whole team, and we’ve made 10 times as much profit as before.

Tip number one –  profit first.

Pricing

Tip number two is prices. When was the last time you increased your prices?

If you’ve increased your prices and you got no adverse impact, then increase them again.

You should continue to increase your prices until you start to get consistent feedback.

If you are winning every job, your prices are too low.

If you are winning 50% of your jobs, and losing 50% of them because of price, you probably got your price at about the right level. But if you are losing jobs and they’re telling you that it’s because of price and you don’t have a red hot selling system and follow up system for your sales, then price is probably the excuse.

I have just signed up with a person to do some earth moving work on my surf shed for the foundations.

I was prepared to pay 15% more for somebody

  1. who knew what they were talking about,
  2. showed me they were experts,
  3. and gave me a really quick price and a timeframe that I could work with.

Those three things gave them a 15% price advantage over everybody else. They make more money and I’m happy as a customer because I feel like I’m getting the right person for the right job.

Don’t just assume if you lose it because you’ve been slack with your follow up and they say it’s because of price, it’s because of price. What you want is them to be telling you it’s price and coming back to you. If you are not getting that done at least 50% of the time, your prices are too low and you need to up them, because if you up the price, that extra money you make is profit. If you up them by 5%, you’ve just made 5% extra profit in your business.

Debt Follow Up

The third thing is your debt follow up.

If you are sending out invoices and then just leaving them out there, you could have 5, 10, 50, 100, 200, $300,000 worth of money that’s sitting in other people’s pockets that should be in your pocket.

If you are a trades-based business, or a service-based business, then why aren’t you collecting?

If you’re doing one off jobs, you should be collecting payment in advance or at the completion of the job by credit card. Make it easy for them. They can pay by credit card or direct debit when you are finishing the job.

Don’t give them an invoice and wait 30, 40, 60 days, 90 days to get paid.

The sooner you can get paid, the sooner you get money moving through your business, and the better your cash flow, and the more profit you’re going to make.

There are my three tips for today.

Number ONE:

If you want to increase the profit and cash flow in your business, one, start taking profit out from every dollar you receive and putting it in a separate account. Start small, work your way up.

Number TWO:

increase your prices. If you haven’t increased your prices in the last 12 months, you need to increase in your prices. You need to continue to do them until you get consistent pushback. Then you leave it for a while and you do it again in another 12 months.

Number THREE:

You need a great debt follow up. If you are resending invoices and you’re not consistently following them up, you’re leaving money in other people’s account, you are making it hard for yourself. You need to make sure that you’re getting paid as soon as possible, and sometimes, that’s on completion of a job.

These three tips can make your cash flow and profit work better.

Hope they’ve been helpful.

If you’ve got any questions, reach out to me.
Look forward to talking too.

Full Transcript

I want to talk to you about the importance of profit.

Here are three tips to make sure that your profit and your cash flow are improving.

Profit First

The first thing you can do to make sure that you’re getting profit in your business is take out profit from every dollar that you receive and put it in a separate account that you don’t use for your business, you use it for yourself.

This is a principle called Profit First introduced to me by Mike Michalowicz in his book Profit First.

Simple System

It’s a really simple system that I use in my business and I’ve 10X-ed my profit, while paying everybody exactly the same amount of money and nobody has felt that they’ve actually reduced what they were getting from the business.

Simple System

It’s a really simple system that I use in my business and I’ve 10X-ed my profit, while paying everybody exactly the same amount of money and nobody has felt that they’ve actually reduced what they were getting from the business.

I’ve been able to pay all my suppliers, I’ve been able to pay my whole team, and we’ve made 10 times as much profit as before.

Tip number one –  profit first.

Pricing

Tip number two is prices. When was the last time you increased your prices?

If you’ve increased your prices and you got no adverse impact, then increase them again.

You should continue to increase your prices until you start to get consistent feedback.

If you are winning every job, your prices are too low.

If you are winning 50% of your jobs, and losing 50% of them because of price, you probably got your price at about the right level. But if you are losing jobs and they’re telling you that it’s because of price and you don’t have a red hot selling system and follow up system for your sales, then price is probably the excuse.

I have just signed up with a person to do some earth moving work on my surf shed for the foundations.

I was prepared to pay 15% more for somebody

  1. who knew what they were talking about,
  2. showed me they were experts,
  3. and gave me a really quick price and a timeframe that I could work with.

Those three things gave them a 15% price advantage over everybody else. They make more money and I’m happy as a customer because I feel like I’m getting the right person for the right job.

Don’t just assume if you lose it because you’ve been slack with your follow up and they say it’s because of price, it’s because of price. What you want is them to be telling you it’s price and coming back to you. If you are not getting that done at least 50% of the time, your prices are too low and you need to up them, because if you up the price, that extra money you make is profit. If you up them by 5%, you’ve just made 5% extra profit in your business.

Debt Follow Up

The third thing is your debt follow up.

If you are sending out invoices and then just leaving them out there, you could have 5, 10, 50, 100, 200, $300,000 worth of money that’s sitting in other people’s pockets that should be in your pocket.

If you are a trades-based business, or a service-based business, then why aren’t you collecting?

If you’re doing one off jobs, you should be collecting payment in advance or at the completion of the job by credit card. Make it easy for them. They can pay by credit card or direct debit when you are finishing the job.

Don’t give them an invoice and wait 30, 40, 60 days, 90 days to get paid.

The sooner you can get paid, the sooner you get money moving through your business, and the better your cash flow, and the more profit you’re going to make.

There are my three tips for today.

Number ONE:

If you want to increase the profit and cash flow in your business, one, start taking profit out from every dollar you receive and putting it in a separate account. Start small, work your way up.

Number TWO:

increase your prices. If you haven’t increased your prices in the last 12 months, you need to increase in your prices. You need to continue to do them until you get consistent pushback. Then you leave it for a while and you do it again in another 12 months.

Number THREE:

You need a great debt follow up. If you are resending invoices and you’re not consistently following them up, you’re leaving money in other people’s account, you are making it hard for yourself. You need to make sure that you’re getting paid as soon as possible, and sometimes, that’s on completion of a job.

These three tips can make your cash flow and profit work better.

Hope they’ve been helpful.

If you’ve got any questions, reach out to me.
Look forward to talking too.

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