Profit or the Bottom Line, is ultimately the best financial measure
of your business's success. It is the thing that we are all seeking
and the thing that we are always trying to increase.
After all, everything else that we do in our business, whether it is
marketing, sales, production or team building, they are all
intended to increase profits in some way. Of course, there are
other great reasons to build excellence into your business, but
Profit is the final measure that counts.
So, how do we get those profits up?
Well, there are a myriad of things that we can do. In every area
of our business lies some opportunity to improve our profits. But
the easiest and fastest way to bring up our profit is by
Raising Prices! By increasing our prices by a modest 5-10%, we
can impact our profit margin by significantly more than that
percentage.
Look at the table below. If we start with a 20% profit margin and
either discount or increase our price by 10%, we affect our profit
margin by a massive 50%! Discounting can be devastating to a
business, but increasing your prices, even by a little, can do
wonders for it! Which strategy do you choose; discounting or
increasing your prices?
So, why are businesses so reluctant to raise prices? The answer
is FEAR.
We are afraid that if we raise our prices, our clients will go
elsewhere. Well, that fear is highly overrated. Price is a factor in
people’s buying decision but it ranks far lower than we think.
Most people will not even notice an increase in price. Of course
some may leave but they will be a relative few. In analysis, you
can actually afford to lose some business when you raise your
prices and still be ahead of the game.
As an example, if your profit margin is 25% and you raise your
prices by 10% - you could actually lose 29% of your business
before your profits would suffer. Now, there’s no way that almost
30% of your customers will leave if you raise your prices by 10%.
So you are pretty much guaranteed to be ahead.
Click on the following link for a full analysis of the effect of
increasing your prices and the amount of business you can
afford to lose before your profits suffer. You will be surprised!
In our newsletters over the past few months, we have talked
about differentiating your business and providing your customers
with a powerful Unique Selling Proposition.
If this is in place, I guarantee your clients are not buying on just
price. Your customers come to you because of your unique
products, or your terrific service, or the buying experience you
provide, or whatever it is you do best. But not just because of the
price!
We tell all of our clients to raise their prices, very early on in our
work together. Almost all of them do so and not one of them has
ever come back to say that they suffered any negative effect. In
fact, some of have said that this piece of advice was worth the
whole investment of the coaching program all on its own.
So, the easiest thing to do about increasing your profits is to
raise your prices. The reason most people don’t do it is because
of an unfounded fear that their business will suffer.
How much will you raise your prices and when?
===============================================
Jim Gragtmans and Sandy Kemp are Action International
Business Coaches helping business owners grow their business
& do more with less effort.
Why are some businesses able to stand out from the crowd and
sell lots of product, very profitably? Because they have a Unique
Selling Proposition (USP).
Click here to learn more
www.actionbusinessdevelopment.com/products.html
================================================
**Attn: eZine editors and Site Owners**
Feel free to post this article in it’s entirety in your ezine or on
your site as long as you leave all links in place and include our
resource box as listed above.
If you need additional articles, check out our Article Archive for
fresh new content you can use on your website for FREE!
www.actionbusinessdevelopment.com/Tools.html
If you do use our articles, please let us know so that we can have
a look. Thanks
Jim & Sandy
mailto:jimgragtmans@action-international.com
mailto:sandykemp@action-international.com
of your business's success. It is the thing that we are all seeking
and the thing that we are always trying to increase.
After all, everything else that we do in our business, whether it is
marketing, sales, production or team building, they are all
intended to increase profits in some way. Of course, there are
other great reasons to build excellence into your business, but
Profit is the final measure that counts.
So, how do we get those profits up?
Well, there are a myriad of things that we can do. In every area
of our business lies some opportunity to improve our profits. But
the easiest and fastest way to bring up our profit is by
Raising Prices! By increasing our prices by a modest 5-10%, we
can impact our profit margin by significantly more than that
percentage.
Look at the table below. If we start with a 20% profit margin and
either discount or increase our price by 10%, we affect our profit
margin by a massive 50%! Discounting can be devastating to a
business, but increasing your prices, even by a little, can do
wonders for it! Which strategy do you choose; discounting or
increasing your prices?
So, why are businesses so reluctant to raise prices? The answer
is FEAR.
We are afraid that if we raise our prices, our clients will go
elsewhere. Well, that fear is highly overrated. Price is a factor in
people’s buying decision but it ranks far lower than we think.
Most people will not even notice an increase in price. Of course
some may leave but they will be a relative few. In analysis, you
can actually afford to lose some business when you raise your
prices and still be ahead of the game.
As an example, if your profit margin is 25% and you raise your
prices by 10% - you could actually lose 29% of your business
before your profits would suffer. Now, there’s no way that almost
30% of your customers will leave if you raise your prices by 10%.
So you are pretty much guaranteed to be ahead.
Click on the following link for a full analysis of the effect of
increasing your prices and the amount of business you can
afford to lose before your profits suffer. You will be surprised!
In our newsletters over the past few months, we have talked
about differentiating your business and providing your customers
with a powerful Unique Selling Proposition.
If this is in place, I guarantee your clients are not buying on just
price. Your customers come to you because of your unique
products, or your terrific service, or the buying experience you
provide, or whatever it is you do best. But not just because of the
price!
We tell all of our clients to raise their prices, very early on in our
work together. Almost all of them do so and not one of them has
ever come back to say that they suffered any negative effect. In
fact, some of have said that this piece of advice was worth the
whole investment of the coaching program all on its own.
So, the easiest thing to do about increasing your profits is to
raise your prices. The reason most people don’t do it is because
of an unfounded fear that their business will suffer.
How much will you raise your prices and when?
===============================================
Jim Gragtmans and Sandy Kemp are Action International
Business Coaches helping business owners grow their business
& do more with less effort.
Why are some businesses able to stand out from the crowd and
sell lots of product, very profitably? Because they have a Unique
Selling Proposition (USP).
Click here to learn more
www.actionbusinessdevelopment.com/products.html
================================================
**Attn: eZine editors and Site Owners**
Feel free to post this article in it’s entirety in your ezine or on
your site as long as you leave all links in place and include our
resource box as listed above.
If you need additional articles, check out our Article Archive for
fresh new content you can use on your website for FREE!
www.actionbusinessdevelopment.com/Tools.html
If you do use our articles, please let us know so that we can have
a look. Thanks
Jim & Sandy
mailto:jimgragtmans@action-international.com
mailto:sandykemp@action-international.com
The Simplest and Easiest Way to Increase Your Profit
| Feel free to use this article |
**Attn: eZine editors
and Site Owners**
Feel free to post this
article in it's entirety in
your ezine or on your
site as long as you
leave all links in place
and include our
resource box as listed.
If you do use our
articles, please let us
know so that we can
have a look.
and Site Owners**
Feel free to post this
article in it's entirety in
your ezine or on your
site as long as you
leave all links in place
and include our
resource box as listed.
If you do use our
articles, please let us
know so that we can
have a look.
