Got Profit Disappointments? Are You To Blame?

If your business isn’t as profitable as you think it should be, you may be unintentionally to blame.

Business owners tell me on a regular basis that they don’t like their finance person, and they try to spend as little time as possible with that person.

I can understand the emotion, but need to point out that:

  1. You probably have a weak finance person.
  2. If you had a strong finance person, your profits could be 50% or more higher.

The factors that determine profitability are usually details most business owners don’t think about, much less monitor or manage.

Most privately owned businesses carefully track their largest customers but usually have no idea who their most profitable customers are.

When I mention this to most business owners, they look at me quizzically and ask, “Aren’t they the same?”  My unequivocal answer is, “No. The largest customers are rarely the most profitable.”

Thanks to a new Controller, one of our clients learned that one third of their sales were at best a breakeven and raised the prices to this customer group.

            Profits in the following year more than doubled.

If you are willing to consider that you may need a new approach to reverse your profit disappointments, we should speak.

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