THE ENTRECODE BLOG
Finding Your Hidden Profits……
My job is to help my clients to find the profits which are often hidden away in their business.
You can divide my clients up into three groups:
- Those who struggle to break even every year or make a small profit. The hidden profits here are found by applying the principle ‘the easiest way to make money is to stop losing it’. Back to basics tools like Zero Based Budgeting, Fixing System Slippage, and ‘Moneyball’ type analysis generally reveals significant hidden profits which can be quickly liberated. This normally lifts them to their industry average.
- The second group flat line along around the norms for their industry often 1-5%. Some are happy to do this and that’s fine, others want to grow the business or prepare for exit and need to boost profits in order to achieve their goals. The key is to help them look at their business differently, the opportunities to boost profits come from in-depth analysis of where money is made and lost in existing products or markets. Exiting loss makers and refocusing on profit makers is a good start. Then a range of tools and analysis can be used to really drive up margins including customer perception surveys, efficiency groups, better alignment between goals and strategy and an array of others. A number of businesses have become market leaders in profitability in their industry using these approaches.
- Finally the third group consistently make profits 2/3 times the average for their industry (these are rare). The key here is to conduct a detailed risk analysis so they don’t go backwards. Most business failures are generally preceded by a period of sustained success, this unfortunately only becomes obvious after their demise.
I will be presenting a workshop at BizWeek 2014 in Hull for CEOs and senior managers on how their businesses can find their hidden profits.
Watch this space for more details…….
