| If your plant & equipment needs regular maintenance... |
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Does your business ?If your equipment requires regular maintenance to run properly do you also need to regularly maintain your business? You operate equipment in your business, from vehicles to computers, and for many businesses, much more and complex equipment. And you know that without proper maintenance the equipment will not run efficiently. You also know the longer you leave maintenance the more likely something is to go really wrong and end up costing you real money. A recent article brought to mind the parallels with a business.
"Improper maintenance can erode the bottom line of an energy management program. Dirty air filters add load to fan motors, and compressed air systems can develop leaks over time. Improperly tensioned and aligned V-belts can reduce transfer efficiency from 97% to 88% (5%). While it's helpful to divide energy management programs into six basic elements, it's impossible for them not to be intertwined - and the benefits are cumulative. In the end, successful programs will drive all the elements with authority, and with the knowledge that the best return will come from a coordinated and sustained effort." What would be the effect on your Nett Profit if your Gross Profit crept down by 5%? Or if your overheads crept up by 5%? The effect is considerable, disastrous in fact. It would come straight out of your bottom line. If you don't know see "Don't increase Sales - Increase Gross Profits". So how can you maintain your business? Where are the "dirty filters", "leaking compressed air systems" and "improperly tensioned belts" to be found leaking profits from your business?
Here are just some areas that might need regular maintenance in your business: Poor communication of your product or service's unique benefits - if you can't clearly and simply say how brilliant and different your offer to customers is you will be seen as a commodity and have to charge commodity prices. My experience of many companies is that there is a great offer that could charge both higher prices and drive more volume if it was communicated more clearly and more compellingly. Poor selling skills - sales are the lifeblood of business, and those who can get great win-win deals will do better over the long run than those who "settle" too early. Are you leaving money on the table because you are over anxious to get to 'yes'? Poor procedures, processes and systems - if you don't have good efficient systems and procedures, then chances are you're leaking profits somewhere along the line. Could yours be better? Lots of waste in the office or factory floor - where there's waste there's a profit leak, and that also applies to all businesses. Can you say there is no waste in your business?
Did you nod and say yes to any of these? A little regular maintenance will make a significant difference to your nett profit. BTW the last four newsletters to subscribers have been providing tips on improving the selling process. Subscribe, send me an email and I will forward you copies. ![]() ![]() © Copyright 2009 Adam Gordon, Profits Leak Detective
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