What impacts the bottom line more than small things? Nothing! Every small change you make adds up in a large way.
When you “goal set” and you have that one big goal at the end. Now let’s say you decide that one big goal is that you want to make more money. You can do this by selling more! So you have a sale, you reduce your price and increase your advertising, and you sell more. Did you make more money? Maybe, let’s take a look. If you sell 10 widgets at $9 ($90) but 20 widgets at $7 ($140) The widget cost you $5 and the increase ad cost you $20 – you’re at $90-$50 or $40 total vs. $140-$100 – $20 ad or $20. Eek!
So how do you make more money?
It’s a very old saying, but your money is made on the buy, not the sell. Think about buying a house. The lower the cost of the buy the more money you will make. Same holds true for everything. When you buy the product you are going to sell, the lower your cost the better! Shop around.
Let’s look at water. We sell bottled water. Let’s be honest, it’s water. Do people want a fancy name or do they want water at a reduced price? For our store, they want the reduced price. We found a private label manufacturer and we reduced the cost of the water by $1.25 a bottle. We even dropped the price to the customer by 70cents. We now make 90cents more per bottle! It’s still water. The price was reduced to the customer. And if we sell 1,000 bottles that’s an extra $900.00!
Here comes my favorite phrase: “If you saw $900 laying on the ground, you’d pick it up, right?” We have done nothing different, other than pay attention to one small thing… like the cost of one bottle of water.
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1- Pick one product you sell (and it can be a service) and analyze the cost of every component to make, manufacturer, and receive it. Find the area(s) to reduce the costs.
2- Install my free app! (SmallBusinessClubApp.com)
How much hidden money did you find when you did Action Step One?
Listen to Episode #151 of the Two Minute Commute audio blog Podcast
Love this inspirational quote? View it on a 12″ x 12″ Canvas “Social Square” wall hanging!