It is all about Profit not Turnover!
I remember when I built my first company and I was doing about $12,000,000.00 in turnover my EGO got as big as my turnover.
I thought I knew it all and I was out sponsoring Rosehill Races on a Saturday (and also having a few losing bets. Grrrr)
And it was understandable as I had all my suppliers asking me how I became so successful, telling me I was great etc. Little did I realise this was a very false reality I was living.
However, there was an inconvenient truth about my business that I was not aware of because I did not have a Business Mentor to teach me.
You see, even though I was doing high turnover, at the time I was only making a 2.5% profit. ($360,000.00)
Now that seemed like a lot of money to me at the time, but considering the sales I was making it was very low. It should have been at least 10% profit. ($1,200,000.00 a year)
The biggest mistake I made on my business was focusing on my Turnover (my ego) rather than my profit.
In the next company I built, I learned to focus on Profit instead of turnover and I realised I could make more profits in my company by having less clients, but maximising the lifetime value.
The way I did this was to realise that I was not in the air conditioning business, I was in the “Home Comfort” business.
This gave me the right to do the following:
- Offer a 10 year parts and labour warranty
- Offer water purifiers
- Individual temperature control
- Air purification (eliminate hayfever and smells)
As a result I increased the lifetime value of my clients from $1500.00 to between $4000.00 and $6,000.00
And the reward was I did 30% less work and yet I increased my net profit to 10% (YAHOO)
An Inconvenient Truth About Business Moment!
What business are you really in?
EG: If you have an Security Alarm Business – You are not in Alarms you are really in the peace of mind business. This could increase your services to include
High Security Door Locks
GPS tracking systems for people and vehicles
Personal Investigation services
I could go on. I hope you get the idea.
STREETSMART BUSINESS OWNER ACTIONS
Get a Mentor! (that has a PROVEN track record and stands behind their commitments)
Ask yourself what business am I really in?
Am I looking after my existing clients as well as I could be?
What other challenges do my clients have that I can solve?
How can I communicate that I offer these additional services?
HOW DO I KEEP MY CUSTOMERS FOR LIFE?
If you would like to know more about becoming a Streetsmart Business Owner
(description: A savvy Business Owner that understands the power of leveraging other peoples knowledge and skills.)
Rather than a Sheepsmart Business Owner.
( description: A Business Owner that prefers to make costly expensive mistakes by DOING WHAT THE MASSES DO and not leveraging the knowledge of other Successful Business People.)
Then click the picture below to learn more Streetsmart Business Skills:
Always Focus On Building a Business Not A Job!
Click the Big Red Button to claim your Streetsmart Business Acceleration System