Need More Cash in Your Pocket? Eliminate Bad Revenue

11 January, 2013

How to Eliminate the 4 Main Sources of BAD REVENUE in Your Business and Add More Cash in Your Pocket

Let’s face it – “BAD REVENUE” eats away at profits and reduces the cash in the pocket of many business owners. Many businesses today have sources of “BAD REVENUE” and don’t know what to do about it.

Let’s identify the Four Main sources of “Bad Revenue”.

CUSTOMERS: I know what you may be thinking, “the customer is always right”, “and “customers are king”. The reality is that this thinking could land your business into trouble by taking cash out of your pocket! Most businesses do not track the cost of supporting their top revenue generating customers. There are many hidden costs often associated with typical customer “fire fighting techniques” such as rush shipments, warranty replacements and customer emergencies. Now we must respond to customers as they pay the bills, but the sad thing is that in many cases some “important” customers often push down your price, stretch out your days of receivables and consume resources. On the surface they seem very important, but are they? In many cases, the resources consumed are not tracked or properly allocated to that particular customer.  These costs often get grouped together in a cost of sales account. Business owners need to know that with the right tools, bad revenue customers can be identified.

PRODUCTS: Perhaps product gross margins are not aligned with average selling price and cost of sales. The volatility of world markets is affecting the stability of foreign exchange rates. Fuel prices had a direct affect on the cost of shipping and warranty returns. We call this the silent killers of profit margin.

SERVICES:  With rising fuel rates and wages, your services to your customers may actually be costing you money! Fuel costs alone can dramatically affect the cost of providing fixed rate on-site services or on site guarantee service levels.

A MIX OF ALL THREE – The perfect storm. In our experience, there is a mixture of all three as they are integrated in every business. The challenge is to having the right tools using your company data  to decipher what is going on and more importantly, how to move forward.

HOW DO YOU REPAIR THE PROFIT LEAKS?

Many brands of business accounting software will use theoretical bench-marking to decide what to do. Vague statements such as  “if you increase prices by 3% but drop Cost of Sales by 2%, cash flow will increase.

YOUR BUSINESS IS UNIQUE – YOU NEED TO USE REAL NUMBERS

PROFITS PLUS  uses live data from your business to create an easy to understand, financial bench marking  analysis of your business.  This allows us to give you real results and to create tangible plans for your business that you can implement today and put more cash in your pocket starting NOW! See how easy it is to put more cash in your pocket today! Call us today (289) 290-3322


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