Chasing Profitless Turnover
Are your customers keeping you busy? If the answer is yes, that’s good, isn’t it? Possibly.
For many businesses, seeing the cash come through the door is the most important thing. It really doesn’t matter where it comes from. But all too often, the dollars that come in aren’t paying the bills.
Many business owners do not understand the cost of their products and services. They don’t know what is the profit margin for each service. This usually results in high margin services subsidising, low or zero margin services.
But the funny thing is, the zero margin services are the easiest to sell, so the owner puts all their effort and resources in selling even more of these services, and slowly (or not so slowly) sending themselves out of business.
The harder they work, the more they lose, chasing profitless turnover.
Are you making a profit on everything you sell? If you don’t know, do the math. Is what you see what you expected?
Chasing profitless turnover will send you broke. If you are in this situation, you must take a hard look at your marketing strategy. It’s not sustainable. Delaying a decision is actually making a decision. But probably not the one you want. But quick action can lead you back into the black.
May Your Business Be – As You Plan It.
Dr Greg Chapman – The Profit Whisperer
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