How to Multiply Profits  Profit-Minded CEOs Reveal The Secrets Of Multiplying Profits in Good Times and Bad   AUTHOR:  Pro...
<ul><li>While there are many books written about succeeding in business, very few of these are actually written by busines...
Creating a Strategic Vision to Achieve Profits   <ul><li>Change is something inevitable.  There are changes we create and ...
Finding Your Profit Centers and Creating New Ones   <ul><li>Business in America is becoming increasingly more competitive,...
<ul><li>First, you need to trust your instincts. If something doesn’t feel right to you, such as making an expensive purch...
Use Technology   <ul><li>Use technology in every subsection of the company. Consider automation processes and knowledge ma...
Manage Expenses   <ul><li>Reduce overhead and other expenses where you can. It may not be possible to raise profits by eve...
Handling Risk Effectively   <ul><li>Risk assessment is all about potential return. First, the potential return needs to be...
<ul><ul><li>Vigilance is required for keeping an edge and remaining profitable in any industry. You can do this through ed...
<ul><ul><li>Tips on expanding and sustaining business success: </li></ul></ul><ul><ul><li>Growth is crucial to maintaining...
Tips from the CEOs On Making Profits   <ul><ul><li>Three guiding rules for increasing profits: </li></ul></ul><ul><ul><li>...
<ul><ul><li>Insider Tips for Remaining Profitable </li></ul></ul><ul><ul><li>Increasing profits means always looking at yo...
<ul><ul><li>The Three Tenets of Making Profits </li></ul></ul><ul><ul><li>Maintain a double-digit revenue growth rate. Rev...
BusinessSummaries.com is a business book Summaries service.  Every week, it sends out to subscribers a 9- to 12-page summa...
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How To Multiply Profits

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Transcript of "How To Multiply Profits"

  1. 2. How to Multiply Profits Profit-Minded CEOs Reveal The Secrets Of Multiplying Profits in Good Times and Bad AUTHOR: Profit-Minded CEOs from various compnanies PUBLISHER: Vision Books, New Delhi DATE OF PUBLICATION: 2005 NUMBER OF PAGES: 152 pages
  2. 3. <ul><li>While there are many books written about succeeding in business, very few of these are actually written by business executives, or people who actually run successful businesses. “How To Multiply Profits” is different because it was written by real business leaders from some of the world’s most respected companies. </li></ul><ul><li>Thus, the book offers real world insights, perspectives and advice on the most important issues for success from accomplished professionals who know what they are talking about. It provides a rare opportunity to learn from the best in industry and become an expert yourself on creating a successful business. </li></ul>THE BIG IDEA
  3. 4. Creating a Strategic Vision to Achieve Profits <ul><li>Change is something inevitable. There are changes we create and changes that simply happen to us. With this reality, the best way to manage the future is to be proactive and create it yourself. </li></ul><ul><li>This entails identifying clear goals for success, outlining a plan for execution, and challenging, empowering and developing your people. </li></ul><ul><li>The key to building a business is to begin with a well-articulated strategic vision. Often this can be said in a few words, but these words will be the basis of all that follows. For example, two entrepreneurs may decide to go into the dry cleaning business. But while one may seek to provide the best quality service, the other may envision to offer the lowest prices possible. This will take these two entrepreneurs down two different roads of doing business. </li></ul><ul><li>Establish a clear business philosophy founded on values of honesty, integrity, and open communication throughout the company, as well as concern, consideration and fair treatment for customers, partners, and employees. </li></ul>
  4. 5. Finding Your Profit Centers and Creating New Ones <ul><li>Business in America is becoming increasingly more competitive, and most business owners are facing pricing pressures. One strategy to face this challenge effectively is to find your profit centers. </li></ul><ul><li>This is not easy. You can do this by first holding a strategic workshop with all the key leaders in your company and undertake a SWOT analysis (Strengths, Weaknesses, Opportunities, Threats) of your company and your competitors. </li></ul><ul><li>Maintaining Your Profit Centers </li></ul><ul><li>Also remember that you should keep your focus on main profit centers, and ensure that they remain consistently profitable. This is equivalent to “knowing what you do well, and sticking to it.” Stay close to your core areas of business and maintain a consistent focus. </li></ul><ul><li>Finding New Profit Centers Across The Globe </li></ul><ul><li>The task of finding new profit centers for a company depends on the nature of the company and its products and services. And many companies will find that their main profit centers are geographical in nature. </li></ul>
  5. 6. <ul><li>First, you need to trust your instincts. If something doesn’t feel right to you, such as making an expensive purchase or hiring a new employee, then call on your experience and gut instinct to make the right decision. </li></ul><ul><li>Second, learn how to delegate instead of trying to do everything yourself. This entails trusting the people around you; a business will never grow without the collaborative contribution of the people that make up the company. </li></ul><ul><li>Third, while it’s often said that no one is irreplaceable, it’s critical that you grow and mature key management positions. </li></ul><ul><li>Also, to be a good business leader, you need to know what your customer wants. Attention to the customer is the true gauge of management success. </li></ul><ul><li>Know your limitations. This means knowing and embracing the things that you are not good at, and identifying the people who can do them best and putting them in the best position to do the job. </li></ul><ul><li>Be passionate and creative. If you are not passionate about what you are doing, chances are you will fail. Passion also releases your creativity </li></ul><ul><li>Be positive. In business, you have to believe in the possibilities to have a successful plan for the future. </li></ul>Crucial Leadership Strategies
  6. 7. Use Technology <ul><li>Use technology in every subsection of the company. Consider automation processes and knowledge management systems that can make information sharing easier. Invest in the right critical technologies (such as the right Killer App – also known as a critical business software application – to manage your business workflow) that will provide a definite return on investment and allow you to scale and maximize profits. </li></ul><ul><li>Use the Internet to make a global reach. The Internet is a tool to make the presence of the company felt, and it’s also a vital resource for marketing, customer support and collaboration. </li></ul><ul><li>Use Internet-based conferencing solutions such as Placeware to reduce rising travel cost and save time. </li></ul><ul><li>Only use proven technology. Don’t invest in all the latest gizmos and software. Be wary of new technology that doesn’t actually save time or provide a way to be more cost-efficient. Don’t adopt technology for technology’s sake. </li></ul>
  7. 8. Manage Expenses <ul><li>Reduce overhead and other expenses where you can. It may not be possible to raise profits by even 10% in the short-term, but you can still cut expenditures very quickly. Renegotiate your lease, for example. Think pruning, and profits eventually rise to the surface. </li></ul><ul><li>Selling, general and administrative expense should always grow more slowly than revenue. Strong ties between staff and line people are the keys to this. Build this through shared goals and frequent communications. Identify short- and long- term goals for reducing expenses. </li></ul><ul><li>If your overhead is growing faster than your revenue, then you are probably building for the future, which is often a bad idea. Buy only what you need right now; never build for the future because the future may not happen. Many companies have gone out of business by spending on capacity, space or people for a future growth that never materialized. The trick here is to always live within your means. </li></ul>
  8. 9. Handling Risk Effectively <ul><li>Risk assessment is all about potential return. First, the potential return needs to be significantly higher than the cost of failure. Second, you need to determine if the application or project is within the core expertise of the company. If so, then the odds of failure are low, and if not, then the potential return better be significant, or it should not even be considered. </li></ul><ul><ul><li>Ask yourself three questions when assessing new risks: </li></ul></ul><ul><ul><li>What is the possible return on investment and is it worth the gamble? </li></ul></ul><ul><ul><li>Can we actually afford to take the risk? </li></ul></ul><ul><ul><li>Can we afford not to take the risk? </li></ul></ul>
  9. 10. <ul><ul><li>Vigilance is required for keeping an edge and remaining profitable in any industry. You can do this through education. Read constantly. Keep up to date about the trends and other development in your industry. In addition to reading broadly, it’s important to listen. Listen to your customers, supplier, employees and competitors. </li></ul></ul><ul><ul><li>Also, fear can be a healthy thing. Remember that the competitor you should be worried about may not even be on your radar screen today. </li></ul></ul><ul><ul><li>Don’t be afraid of experimenting and of failure. From failure comes knowledge and experience which will lead to your next success. </li></ul></ul><ul><ul><li>Always learn from your mistakes. Never make the same mistake twice. If necessary, write down the mistake and what you learned from it and share it with your managers and employees if appropriate. </li></ul></ul><ul><ul><li>Figure out what makes money, what you are passionate about, and most importantly, what are the things in which you think you can be the best in the world. </li></ul></ul>Staying Out In Front
  10. 11. <ul><ul><li>Tips on expanding and sustaining business success: </li></ul></ul><ul><ul><li>Growth is crucial to maintaining a successful business so expand existing business segments, differentiate products and services, and constantly improve technology. </li></ul></ul><ul><ul><li>Evaluate no profit centers and opportunities by looking at margin, intellectual property, distribution channel and return-on-investment. </li></ul></ul><ul><ul><li>Protect your unique products through patents because patents provide a significant barrier-to-entry to competitors. </li></ul></ul><ul><ul><li>Periodically evaluate existing product lines to assess changes in the market place, technology, demand, and customer preferences. </li></ul></ul><ul><ul><li>Conduct financial analysis to manage risks well. Risk can range from insignificant investment to ‘betting the farm.’ </li></ul></ul><ul><ul><li>Spend to benefit business, especially for research and development and patents, as these are the lifeblood of future growth and success. </li></ul></ul><ul><ul><li>To maintain your edge and stay profitable, constantly analyze your business – get good data on your sales, products, areas of operation, markets, and customers. </li></ul></ul><ul><ul><li>Know your customers. Talk to them, make sure you know what they need and provide these. Include customers in the production process to make sure you come up with products that will sell. </li></ul></ul>Tips from the CEOs On Making Profits
  11. 12. Tips from the CEOs On Making Profits <ul><ul><li>Three guiding rules for increasing profits: </li></ul></ul><ul><ul><li>Work to align the interests of all of the people involved with your company – stakeholders, employees, business partners, customers, vendors, and the community in which the company is located. </li></ul></ul><ul><ul><li>Approach each endeavor with a strong work ethic. Nothing replaces hard work. </li></ul></ul><ul><ul><li>Strictly adhere to a consistently applied business process. It can be as simple as: make a plan, clearly communicate the plan, monitor results, and react to them with changes as necessary. </li></ul></ul><ul><ul><li>Golden Rules of Success: </li></ul></ul><ul><ul><li>Understand and watch the numbers </li></ul></ul><ul><ul><li>Continuously seek for improvement in the area of customer service. Remember that profits come from serving customers better than the competition. And customers make buying decisions based on their perception of value and great experiences, not just on prices. </li></ul></ul><ul><ul><li>Always look for niches and other services that you provide that deliver higher margins. </li></ul></ul>
  12. 13. <ul><ul><li>Insider Tips for Remaining Profitable </li></ul></ul><ul><ul><li>Increasing profits means always looking at your costs, ensuring they don’t increase along with inflation. One way to do this is to reorganize to allow sharing of back office and administrative resources. </li></ul></ul><ul><ul><li>Make sure that you have documented quality processes that allow new employees to be trained quickly; this will ensure that you have a profitable business throughout the years </li></ul></ul><ul><ul><li>Try out new ideas and make sure you reward new endeavors, even if they are not huge successes. </li></ul></ul><ul><ul><li>Top-grade your organization and make sure you have “A-players” that are on top of their game, and then continue to challenge them. </li></ul></ul><ul><ul><li>Make sure you always have good reputation with your customers. Do whatever it takes to keep this relationship solid. </li></ul></ul>Tips from the CEOs On Making Profits
  13. 14. <ul><ul><li>The Three Tenets of Making Profits </li></ul></ul><ul><ul><li>Maintain a double-digit revenue growth rate. Revenue is the great enabler for performance improvement. </li></ul></ul><ul><ul><li>Manage job margins at current levels. Consistently review all jobs to make sure you are maintaining margins at all times. </li></ul></ul><ul><ul><li>Awareness of individual job margins helps identify trouble spots and develop solutions to such problems. </li></ul></ul><ul><ul><li>Capitalize on the inherent operating leverage of the business. This means making sure that selling, general and administrative expenses grow at a slower rate than sales. </li></ul></ul>Tips from the CEOs On Making Profits
  14. 15. BusinessSummaries.com is a business book Summaries service. Every week, it sends out to subscribers a 9- to 12-page summary of a best-selling business book chosen from among the hundreds of books printed out in the United States. For more information, please go to http://www.bizsum.com. ABOUT BUSINESSSUMMARIES

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