Prince George's Community College Workforce Development & Continuing Education Group Coaching and Training Program

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1 Prince George's Community College Workforce Development & Continuing Education Group Coaching and Training Program Presented by: Professor Derk Mattocks, MBA, MSc. Mgt, LCAPBC

2 Making your Business More Profitable Profits help sustain and fuel growth. Profits drive cash flows. An absence of profits is a path to business failure. The purpose of this CaféCEO Roundtable discussion is twofold. 1. To provide an insight as to why it s important to have healthy profits. 2. How to increase profits without affecting the quality of service/products.

3 Planned Objective of this Briefing Roundtable participants should gain a respectable awareness of: A. Why a business needs to drive profit. B. Where a business is making a profit. C. How to control and cut costs. D. How to recognize profitability of Low-Hanging Fruit (Profitable Ideas).

4 A. Why A Business Needs to Drive Profits Having sustainable profits in your business increases its value. Having a meager to no profit will hamper ability to put money back into business and keep it growing. Less investment in new products, new plant/machinery, new technology and developing current staff and hiring new staff. It makes it harder to attract finance into the business from outside sources. To start, you must have reliable and accurate management accounts to determine your profit level. Find out how much of your business is in profit Look into where your business can become more efficient (increased revenue and reduced costs)

5 B. Where A Business Is Making A Profit Which part (s) of your business are generating profits, and which are not? Which of your customers bring in the most value to your business? Then focus on your most profitable clients and look at how you can expand the services/products you sell through diversification or cross-selling. Look at your competitors and ask whether your product is fully competitive, and if your service is of the highest quality in the market. Assess your pricing structure and determine whether you are charging as much as you could or should for your services or products. What is the profitability of each of your sales Document profit and loss accounts for monthly management sessions

6 C. How To Control And Cut Costs Uncover, and minimize waste in your business and manage costs closely. Look at savings based on the type and number of suppliers you use and whether you can buy cheaper raw materials. Focus on reducing costs in these areas by 5% annually. Look at limiting/reducing overheads and tax liabilities when and where possible. More efficiencies can be gained in how you use your premises. Lower rents for longer contracts Sublet unused space - and what you pay to power suppliers. Do not let your cost-cutting come at the expense of driving down the quality of your products and services.

7 D. Recognizing Profitability of Low-Hanging Fruit The book, Low-Hanging Fruit, by Jeremy Eden and Terri Long is a great resource for ideas to quickly improve your business performance. Your low hanging fruit are those opportunities, ideas, decisions and actions that are right in front of you. They are the easy route to success. See Handout.. (Profitable Ideas).

8 E. Forward Thinking Business owners Identify opportunities, arising due to a new need Take on new jobs or projects requiring client s skills, or opportunities due to mistakes made by competitors. Visualize desired outcome (s). Business owners and entrepreneurs with a clear vision of the end result tend to move in that direction more quickly than those without. Establish forward thinking attitudes, that every challenge has a solution.

9 E. Forward Thinking Business owners cont. Identify appropriate resources: Including time and, most importantly, a personal commitment to succeed from everyone. Other resources may include money, equipment, training and information. Train and develop skillsets: Focusing on how to identify strengths and opportunities for improvement; encouraging successes; delegating and holding others accountable for that progress. Reinforce behavior toward progress: It is one thing to know what to do. It is entirely a different thing to do what you know. Recognize benefits and reward: Some encouraging ways to cement growth and progress is to be able to measure reward for it. Rewarded behavior is repeated, and what gets repeated becomes habit.