Revenue does not necessarily equal business profits. It requires a balancing act delivering goods or services that satisfy the customer at a reasonable price and a cost effective way, for you to make a decent profit. Business owners tend to focus on revenue and ignore, or are not aware of, what makes them money.
You may have various products and services that contribute to your revenues. Have you segmented them and understand which ones contribute the type of revenues you need to turn a profit? Don’t feel silly – you are not alone in missing this crucial concept.
Knowing what makes up your pricing model, the inputs and profit margins, is something all business owners need to master. You may be selling lots of a particular product that, in fact, is losing you money or dragging down your bottom line. I have created the following infographic to outline 4 basic steps that you can follow right now, in changing your profit margins for the better.
Even if you only have one service that you offer, it still pays to understand exactly what it is costing you to deliver that service in time and overheads.
Brian helps small business owners win back their time, passion and performance utilizing a proven step by step blueprint for success. A coach and consultant for over 10 years specializing in business growth strategies.