Business Systems and Processes (Operations)

Today we will discuss “The Profit Zone”, which is how you bring the product or service to market.

Do you want to make money in your business? If so, it’s important that you make sure the processes associated with your operational model are as efficient as possible. The 2^nd step in the review of your systems and processes is maximizing the Profit Zone. In order to make money in your business the costs for bringing your product or service to your customers must be as low as they possibly can,. The price for your product is at a level that is fixed by the market.  However, the cost may fluctuate and this is where you have some control as the business owner to optimize your supply chain. When you subtract your cost from your sales price, this will represent your gross profit. Continue to review your operations and look for ways to save money.

We also can’t forget about customer service. Please provide your customers with what they have paid for. If there is a problem just fix it and be quick about it.

Action Steps:

1. If you are bringing a product to market then you must analyze every step in the process from the manufacturer to getting the product to the end consumer, your supply chain. There is a cost associated with each step and your job is to reduce those costs where ever you can.

Examples:

          a. You may need to buy larger quantities from the manufacturer to reduce your price per unit.

          b. You may need to change your method of deliver from the manufacturer, air versus ground.

          c. You may need to change your delivery method to your customer, air versus ground.

 

     2. If you are providing a service it is important that you analyze those costs as well.

 Examples: 

          a. If you have multiple appointments, make sure to schedule them by location so you minimize your travel time and distance, which will save you money.

          b. If you have products that are used with your service find ways to reduce the cost associated with transporting them by bringing them with you versus shipping them ahead of your arrival.

          c. Treat the customer as if he/she was your only customer and do a great job, it is cheaper to get repeat business then it is to find new customers.

In closing, as the business owner if you don’t take control of your costs then they will take control of you and run you right out of business.

For more information, please visit my website at www.alvinperry.com.