Profit Blueprint

This article will help you to develop a profit blueprint to maximize the profitability - and value - of your company.

Phil’s Profit Points™ in Brief:

• The most profitable point in business is where you align your customers’ needs and wants with your intentional business strategy and the effective use of your internal resources.

• The best strategies are externally focused on providing as much value to your customers as possible.

• Customers can vary from strategic partnerships to price-driven commodity buyers with no loyalty or logic.

• Internal resources include: your people, attracting and retaining customers, performing operations and consuming and generating financial resources.

Profit does not come from the accounting department. It comes from providing valuable products and services to your customers who are willing to pay you a fair price that represents the value they receive. The price, obviously, needs to exceed your costs.

Strategy is the intentional alignment of your people and resources in order to provide maximum value to your customers. Therefore, if you can’t provide maximum value, and charge a good fee, then maybe you shouldn’t be doing the work. I remember working with a small business that didn’t know its cost of operations. We determined that it would be cheaper to give a new customer a twenty dollar bill and send them elsewhere than it would to service and retain the customer, because the company was losing money on this product.

The most important part of strategy is your customers. Have you identified or created a need for them that you can meet and generate sufficient profits? Strategy needs to be driven from the outside-in by your customers, and not necessarily from the inside-out by your methodologies. Ask your customers how they benefit from your service.

Your resources include your knowledge, information, historical data, understanding of your customers, as well as your people, assets, equipment, capacity and financial resources. One of the most powerful resources is your relationships: with customers, suppliers, peers, associates, competitors and your own people. You can convert these resources into profits by proactively seeking information from all of them, identifying or creating opportunities, and taking action, quickly.

Blueprint Example (you would do this for each of the customer’s specified needs)

If water can cut steel, when it’s focused at 60,000 pounds per square inch of pressure, then imagine what your company can achieve when all of your resources are focused on your customers through an intentional and aligned strategy.

Tough Question

What are the most valuable products and services that you offer, according to your customers?

From the Piggy Bank

Everyone in your company should be able to articulate your strategy. Otherwise, they may not be aligned or focused on providing value to your customers.

Have a profitable week!