Revenue (1 of 5): Sales / Profits - John M. Leask II CPA/ABV, CVA


Part 1 of a 5 part series

Warning Signs:

    • Falling profits (before owner’s compensation).
    • Falling owner’s compensation.
    • Falling or stagnant sales with falling profits

  • Rising expenses.
    • Cost of goods sold.
    • Decreased gross margin.
  • Significant adverse deviations from budget.

Steps to Improve: SALES / PROFITS

  • Identify your company’s edge in the marketplace.
  • Monitor your competition to keep on top of the market.
  • Evaluate your competitor’s prices.
  • Put yourself in charge of customer relations.
  • Maintain quality customer relations.
  • Identify profit centers; keep the winners and lose the losers.
  • Increase profits, targeting high profit market segments; identify, then go after them.
  • Review total sales and sales by category; are they growing?
  • Establish a brand name; it allows higher markups.
  • Increase prices; they can produce more profits despite large decreases in sales.
  • Price decreases are risky; they require significant increases in sales to sustain profit.
  • Grow by specializing; it creates competitive advantages.
  • Grow by diversifying product line sensibly.
  • Grow by focusing on new emerging needs of your established market segments.
  • Don’t just buy to replenish; anticipate new needs (anticipation buying).
  • Grow by recognizing, understanding, and taking advantage of change.
  • Be sure you are on the cutting edge, not the bleeding edge.

Back to The Business Doctor

>>Revenue (1 of 5): Sales / Profits
>>Revenue (2 of 5): Profitability
>>Revenue (3 of 5): Marketing to Grow
>>Revenue (4 of 5): Selling
>>Revenue (5 of 5): Dealing with Hard Times