Profits are king. When running your small business you see costs everywhere. They are obvious in your space and equipment. In your supplies and utilities. Many of these costs are fixed over the short term. There is nothing you can do to reduce them and maintain your business presence. And other costs including materials, packaging, and shipping are purely variable. You only incur these costs when you are sending out an order.
Costs Impact Profits
Somewhere in the middle are staff costs – including your own. Salaries are often fixed in the short term, and variable in the long term. How do you view these costs in the overall mix of your business? What costs are pure overhead? And what costs are related to products and services?
Value Impacts Profits
Now switch your thinking from costs to value. The two key questions are: 1) What is the value of an hour? And 2) What is the cost of an hour? This analysis is quite enlightening and it’s not as simple as it may first appear.
In small business we all play many roles with widely diverging values. Do the value analysis first for yourself and your time. Then do it for the top people on your team. Determine what is your highest value activity. What do you need to do to perform at your top value?
Run the Numbers for Profits
Calculate how many hours a week you are now performing at your top value. Note your reaction and any changes you’d like to make. Then move on to your team. There is a direct relationship between your team performing at top value and increased profitability in your small business.
Creating your best profit solutions is my highest priority.
Donna Marie Thompson, PhD
Creating your best profit solutions is my highest priority.
http://www.expertprofitsolutions.com
Remember – Just say no to the status quo!™