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Category Archives: Managing business revenue

The Pareto Principle for Profit Improvement

The Pareto Principle (also known as the 80-20 rule) is named after an Italian economist named Vilfredo Pareto. While this principle can apply to many areas of business, let’s look at two possible applications in your small business: Possibility 1) 80% of your profits come from the top 20% of your customer base. Possibility 2) 80% of your custom... Continue reading

Billing by the Hour

This blog is to poke a little fun at the traditional concept of billing by the hour. I apologize in advance for grief it may cause for hard-working professionals. Is the productivity of every hour the same? Is the 8 hours of work the day before a two week vacation the same as 8 hours of work the day after a great Super Bowl party? Are the first ... Continue reading

Establishing a Baseline for Business Growth

Since it’s the beginning of a new calendar year, it’s a great time to make sure your business has a baseline for measuring growth in 2013. If you can measure your activities and results properly, you can quantify your growth. Each of the following should be available to you for each month of last year as well as the total for last year: Reven... Continue reading

Grow Your Business – 4 Ways

There are really only 4 ways to grow your business: 1)      Increase the number of customers (of the type you want) 2)      Increase the average transaction value of each sale 3)      Increase the number of times your customers transact with you 4)      Increase the efficiency of your business to handle the growth With resp... Continue reading

Pricing Strategy – Be Different

For a small business, your pricing strategy should not be only about price. It should be about being different! Here’s why: If your offering is the same as your competition then you allow ‘price’ be the deciding factor. If you are different than your competition, and your customers value that difference and they will pay for that value. If... Continue reading

Instant or Deferred Gratification?

There can be a tendency to celebrate short term business success too soon. Let’s say your business has a good month and you make a nice profit. Should you take a bonus? Should you reward yourself right away? There is a philosophy out there that says to wait – to defer to the future. This is based on the assumption that when a business does ... Continue reading

Rent Some Money to Make Some Money

Have you ever heard the saying, ‘you need a quarter to make a dollar’? What if your business has the opportunity to purchase $100,000 worth of new product that can be resold at a 35-40% mark-up? Why wouldn’t you buy it?  One reason you might not make the purchase is you don’t have an extra $100,000. Even if you have credit available, s... Continue reading

Discounting Your Price or Value Add?

It is fair to state that if you give a customer a ‘deal’, you could sell more than if you didn’t. But instead of giving a discount on price, have you considered adding value instead? As an example, if you discount a $1,000 item by 10% to get the sale you get $900. But if you offer an additional item valued at $100 for free as part of th... Continue reading

A Simple Solution to Small Business Cash Management Problems

I have a small business owning client who I consider to be the best at collecting money from customers. Quite a few years ago he actually went to jail trying to collect money from one customer because he tipped a desk over on him! – We don't recommend that approach! Have a conversation before the sale This conversation results in a few thi... Continue reading

How to Collect Money Owed from Customers

As a business owner, when a customer is late paying their account, they typically get a lot of attention from you. You might even call them up and ask how things are going and find out if you can help them along – so they can pay their outstanding account! But when a customer pays you right away, you tend to do nothing – except cash the cheq... Continue reading