Why Don’t Small Business Generate Higher Profits?
- They don’t know what really drives profit (Hint: It isn’t sales)
- They think they can cut price and make it up with volume (They can’t)
- They either don’t plan or they plan the wrong way (With a boring, meaningless budget which is useless)
- They don’t even know how much profit they are actually making (Their accountant gives them old, misleading information based on meaningless accounting concepts)
- They think that improved productivity will lead to higher profit (It never has in the past, it won’t now)
Profit Guide provides a roadmap for improvement. It includes Excel files so that readers can produce every exhibit for their own firm and start to plan.
Question of the Day
We feel we have to get more price aggressive to drive up our sales volume. How large of a sales increase will be required to offset a price cut?
Answer
Probably a lot more than you think.