By Rich Bond
Running a successful business is not easy. Running a profitable business can be even harder, as it requires a different focus.
Businesses succeed because they offer a better product or service.
Businesses are profitable because they pay attention to specific details that are not part of the normal financial reporting package.
The most powerful profit driver is pricing. As shown in the chart below, pricing is two to five times more powerful than any other profit lever.
A study by McKinsey of 1,000 companies concluded that the one out of three companies that track pricing are worth two times as much as the companies that don’t track prices.
Incredible as it may seem, if you are not tracking your prices, then your prices are probably falling, making it harder to increase profits.
Pricing is one of five financial levers that many privately owned businesses are usually not aware of – let alone using.
If you’re curious about how you to make your business more profitable, feel free to reach out to me. Would be happy to chat. richard.bond@bondandcompany.com.
