Part 1 of a 5 part series
Warning Signs:
- Falling profits (before owner's compensation).
- Falling owner's compensation.
- Falling or stagnant sales with falling profits
- Rising expenses.
- Decreased gross margin.
- Significant adverse deviations from budget.
Steps to Improve: SALES / PROFITS
- Identify your company's edge in the marketplace.
- Monitor your competition to keep on top of the market.
- Evaluate your competitor's prices.
- Put yourself in charge of customer relations.
- Maintain quality customer relations.
- Identify profit centers; keep the winners and lose the losers.
- Increase profits, targeting high profit market segments; identify, then go after them.
- Review total sales and sales by category; are they growing?
- Establish a brand name; it allows higher markups.
- Increase prices; they can produce more profits despite large decreases in sales.
- Price decreases are risky; they require significant increases in sales to sustain profit.
- Grow by specializing; it creates competitive advantages.
- Grow by diversifying product line sensibly.
- Grow by focusing on new emerging needs of your established market segments.
- Don't just buy to replenish; anticipate new needs (anticipation buying).
- Grow by recognizing, understanding, and taking advantage of change.
- Be sure you are on the cutting edge, not the bleeding edge.