Consider a Profit Audit

Important: Traditional profit projections, based on a previous quarter's or the previous year's performance, are very limiting. When a company or a salesperson reaches those budgeted goals or exceeds them slightly, there's an inclination to sit back and do nothing more.

Much better: A profit plan that incorporates a continuous incentive to improve. Think of it as reaching for the stars - you may never get there, but you'll get a lot farther than if you failed to try. 

To come up with new profit ideas for clients, we examine each of the five areas of the business - sales and marketing, personnel, financial matters, operations, and issues of organization. It is not unusual to find hidden profit potential in all of these areas. But we find most companies are strong in some areas and weak in others.

Our job is to build up the weak areas so that instead of dragging down profits, they can contribute and even become profit centers. Here are just a few ideas:

 People Potential. You may think an obvious way businesses can save money and improve profits is to lay off employees. We find, however, that layoffs are often ineffective and usually aren't necessary.

With most companies, the problem is not too many people, but too much unnecessary work. One of our favorite rules of thumb: There's nothing more unprofitable than doing unnecessary work more efficiently.

 Pricing Opportunities. In today's low-inflation economy, many companies are complaining about their inability to boost profits by raising prices. But there are often ways to do this when a company knows which products or services its customers value most

Another idea: Have you performed in-depth customer research? In our experience, surveys result in adding or dropping products or services, as well as re-pricing them.