4 High Profit Tips for Your Business
The race is on and your customer knows it. There has never been more competition for profit in business than there is today. And the competition is going to get even more intense in the months and years ahead.
You can save yourself years of hard work and frustration by applying these 4 great ideas for higher profitability. They can change your business life forever.
1) Develop a Clear Mission for Your Business
For you, your business and your people to perform at a high level everyone needs a clear vision of what the business stands for and where it is going. The first question you have to answer when defining your mission is this. Why does your business exist at all?
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A mission must always be defined in terms of how your business serves and benefits other people. A good mission statement will contain a method by which the mission is to be achieved. In addition, a good mission statement will contain a measure so that an objective third party can assess whether or not the business is living up to the mission that it set for itself.
2) Determine Exactly What Business you are in
It’s absolutely amazing how many people are not quite sure what business they are in, even though they work in that business all day long. Now you always define your business from the point of view of your customer. You always define the business you are in, in terms of what your products or services do for your customer. What effects do your products or services have in the lives and work of your customers? What are the specific benefits that your customers enjoy from using your products or services?
So what business are you in today, from the point of view of your customer? In addition, what business will you be in tomorrow with the way things are going in your industry? Or what business should you be in if you want to survive and thrive in this dynamic and competitive environment?
And finally, what business could you be in if you were to make the critical changes necessary to lead your field? Remember, the very best way to predict the future is to create it. And, as Michael Kami, the strategic planner once said, “Those who do not plan for the future cannot have one.”
Whatever business you are in today, it is probably going to change dramatically in the years ahead. Your job is to be a master of this change, not a victim. Determining exactly the business you are in and being willing to change to be a major player in this business is a major key to your profitability.
3) Determine Exactly Who Your Customer Is
This is the central question of all marketing, sales, and profitability. The ability to accurately answer this question, “Who is my customer,” is the primary determinant of the success of your business.
Define your customer as accurately and as precisely as you can. For example, what is your customer’s age, education, income, position in their business or company or industry, value base, philosophy, and background? Where exactly is your customer located geographically? Where is he or she located within specific businesses or organizations?
Especially, what does your customer consider value? What is your customer willing to pay for? What does your customer want or need that he or she is not now getting from someone else? Why does your potential customer buy from your competitors? What would you have to do to get your non-customers to switch to your products or services? What special benefits would you have to offer them?
Keep practicing “zero based thinking,” with your customers and with your markets. If you were not now serving this market with these products and services, would you start up again today? And who is your customer likely to be tomorrow, next year, or in five years? Who could your customer be if you were to change your product or service offerings? Who should your customer be if you want to be a high profit business in the future?
Finally, what changes do you need to make in your business to be able to attract and keep the high profit customers of tomorrow. This is perhaps the most important question that you ask and answer day after day, in building and maintaining a high profit business.
4) Develop Competitive Advantage or Don’t Compete
This is very important. Your business life depends for its very survival on your ability to develop and maintain a meaningful competitive advantage of some kind. What is it that your company does really well? Where do you perform at a high level? What is the area of excellence of your key products or services?
Your competitive advantage is the aspect of your product or service that makes you superior in a meaningful way to your competitors? Your area of competitive advantage is always defined in terms of what your customer wants, needs, and is willing to pay for.
Every company that survives and thrives has a specific and valued competitive advantage that customers recognize and appreciate. Every company that gets into trouble is a company that has either lost its competitive advantage relative to its competitors in the marketplace, or it’s a company that never had one at all.
Your ability to develop, maintain and protect your competitive advantage is the absolutely indispensable pre-requisite for company growth and high profitability. And since your market is changing so rapidly you must continually ask, “What will my competitive advantage be tomorrow, based on the way things are going?” What should your competitive advantage be if you want to rise to the top of your field? What could your competitive advantage be if you were to make the necessary changes in your product and service offerings?
The major competitive advantages today are: faster, cheaper, or easier; or all three combined with superb and timely customer service. All the most successful and most profitable companies offer high quality products and services, and they offer them quickly. In addition, they give excellent customer service which they continually improve. As the result, they are among the most profitable and fastest growing companies in their industries. And so should you be.
Thank you for reading this article about your customer and business life. Please share and comment below!
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