A litany of leaks - profit leaks

You too can increase profits without necessarily increasing sales!

How?

The “Profits Leak Detective Newsletter” offers regular tips and strategies to help you identify and plug those leaking profits.

You may never have known you have them.

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BONUS free report “7 Clues to a Profit Leak”, valued at $47.

How do you know that you should be looking for leaks?

Are there some clues or symptoms that are telltales saying that a

bit of drilling down into your business might pay some dividends?

Possible leaks could be anywhere.

This report provides 7 clues that should put you on alert for a profit leak.

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"Adam, over the past six years, I've had the pleasure of 'bumping into you' on at least three business and marketing related forums. Your contributionsto discussions have always been courteous, astute, incisive and practical,delivered with good humour, and based upon 'real-world' business experience. You are clearly an experienced business professional who actually knows what he is talking about. I wonder if your clients know what a gem they have in you? As one business professional to another, I salute you.

Good Wishes,
John Williamson - The Wealth Coach
www.thewealthcoach.com
www.retaildisplaysecrets.com

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I just LOVED "7 Clues to a Profits Leak".

Steven Walker - Profit Improvement Advisors
Calgary, Canada

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Thanks for the catch-up the other day. It's great to be working with a legend in the small business community.

AJ Kulatunga, BLKMGK ICT

Darwin, Australia

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The 7 Clues is a great.

What I like the most in the Seven Clues report is that it clearly explains that accounting is merely a subset of proper financial management and

that only the business owner can practise financial management. The accountant does the accounting, and in doing so supports the business owner's financial management. And the business owner uses the accountant's information, but relying on the accountant to do full-blown financial management is short-sighted.

The report nicely "grounds" an otherwise complex topic which many business owners are afraid of touching, so they often move ahead in blissful ignorance. The water hose and the soggy soil under the leak makes an excellent and easy-to-comprehend example, upon which the financial management concept is nicely built.

Tom "Bald Dog" Varjan, Organisational ProvocateurDynamic Innovations Squad
Professional Services Practice Development - Dynamic Innovations Squad
Personal and Firm-Wide Performance Improvement for Management Consulting Firms
Practice Development Services for Management Consulting Firms

Vancouver, BC Canada

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You have played a very important role in my development in business.

You were there with the right information at the right time, I thank you for that.
By adding the next level of systems, and marketing knowledge that you brought to the table we able to identify our objectives, acknowledge the gaps in our business and put in place the planning so as to achieve those objectives. Within 5 years we achieved 9 of our ten stated objectives. In that same year we won the NT Telstra Small business of the year"

Greg Haigh
Director - Trade Group
Regional And Northern maintenance services
RANms

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A litany of leaks - profit leaks

In a recent blog I used a little bit of doggerel from renowned copywriter Gary Bencivenga's to emphasis that unless your advertising and promotions gives the reason why your prospect should buy NOW and why they should CHOOSE YOU your promotion will be ineffective.

And ineffective promotions are a waste of money and your time. In short, a profit leak.

But advertising and promotion are not the only areas in which I come across profit leaks draining business's future. There are many other such profit leaks. In this blog I thought I should identify a few more from across a range of industries to see whether they strike a bell with you.

Do you know the profitability for each customer/account, line of business, or business unit by product, customer or deal? Or do you know only their sales?

Have you benchmarked your business? Do you know how your performance compares to averages in your industry?

Do customers walk out of the door without buying, sales call bear no fruit; lost sales opportunities are a profit leak

Do you have a "sales conversation"? Without a sales conversation you will miss many a sales opportunity. "Can I help you" is not enough?

Are you charging the right price? Could you charge more without losing sales? If you increased your price by 5%, how many sales could you afford to lose before the increase cost you money? You might be surprised at the answer.

Do you leave money on the table by not up-selling or cross selling?

Do you have payment options? Do you have a merchant account that allows you to offer full credit card services? If your competitors are making payment easier than you, they will be picking up sales at your expense.

Are there costs directly attributable to your product or service which should be in the price but are being hidden in your overheads?

What processes don't add value from the customer's perspective? Working from the perspective of the customer, "value" is defined as any action or process that a customer would be willing to pay for.

Can you reduce the time to process orders, allowing you to process more orders in the available time?

Is there waste in your business - tasks that have to repeated, on-going errors that are not fixed, premium freight costs, scrap, re-work, customer returns, complaint servicing etc. They all contribute to leaking profits.

Do you have labour or material overruns, or excessive stock levels? Are you reordering "lost" stock you already have on hand?

Do you accurately allocate income and expenses for each job and track expenditure?

Do you know your real hourly cost of labour? Most businesses don't.

How do you control, and recover non-billable time?

How long is it since you have done a thorough review of your business costs - for supplier related general expense categories such as printed matter, stationary, telecommunications, courier, insurance, cleaning services etc.

Did you find yourself answering "I don't know" to any of these? Then may be it's time to:

1. Take action! Identifying profit leaks is one thing. Plugging the leak is another. So make sure corrective and preventative measures are taken. Implementation is the name of the game. Many good money-saving ideas are lost simply through a lack of action and the leak continues.

2. Measure - Do you have regular, accurate reports on key areas of your business, and on your overheads? If you don't, how do you know whether you have a leak or not? Without measurement there will be no change. Measurement is at the core of all improvement.
If you would like to discuss these further leave your comments below.