Gary Sutton is a turnaround expert. One of the best. His skill is improving profits, and fast. What does he suggest you and I do to improve the profit we earn from our business? Here are a few of the biggies:
- Identify What You Do Best. What meaningful customer benefit do you provide better than anyone else? This ability of yours is the only way to keep customers, earn a profit and stay in business. If you don’t do anything better than the rest, you’re on borrowed time. Not sure what you do best? You better find out or create something, and fast.To begin, ask your customers why they do business with you and what you do better than anyone else. Write it down. Share it with others. Hone it and revise it until you get it right. Don’t worry if there isn’t conclusive evidence that you do it “better than anyone else,” just get it down. More important than what it says about you today is that it should become the vision for your company and the heart of your mission statement. It should be achievable and sustainable. It will be how and why you’ll compete effectively in the future, keep existing customers, gain new clients and succeed.
- Make What Sells. Don’t Sell What You Make. When you have gotten close to your customers and learned what they really want, give it to them. Your entire organization should serve the wants and needs of your customers. Not all customers, but a select group of customers or potential customers who have certain wants or needs that you are more capable of fulfilling (or more determined or focused) than anyone else. If you are making products and then trying hard to find someone who will buy them, you have it backward. Start instead by asking yourself what customer types you are uniquely suited to serve with your products and/or services.
- Find the Profit. Identify products/services that make money, and stop doing the rest. Reinforce, improve and solidify the profitable business, and cut all expenses not needed to deliver profitable products/services. Avoid money-losing and breakeven products/services. If a product/service loses money, try to make it profitable by raising prices. If that doesn’t work, lower prices and see if volume picks up to achieve profitability. If neither works, discontinue the product/service altogether. Then resist the temptation to add products/services that are not competitive and thus not profitable.
Source: The Six-Month Fix, by Gary Sutton
This article originally appeared in The Business Owner Journal, the periodical of choice for owners of small and midsize private businesses. All rights reserved, D.L. Perkins LLC. © 2012.
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