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In our current economic crisis, we business owners must capitalize on the myriad of strategies available to us to make this our time of opportunity.

I will start with the most important element of business, which is the easiest and cheapest to affect, and the most overlooked: Profit. You see, without a profit there is no reason to be in business; you might as well get a job, where at least you don’t have to deal with all of the stress of owning a business.

So what are some strategies for increasing your profit? For starters: measure it. As the saying goes, “You cannot manage what you do not measure.” The only way to know if any actions have made an impact is to know what you currently have.

Knowing your bottom line is not enough. You need to know your margin on every product line. You must measure the cost on every item or service that you sell. If you sell sandwiches, you should know the cost of each leaf of lettuce on each sandwich. Only after you know your numbers are you ready to move on.

Now comes the fun part: implementing profit strategies. The first and easiest strategy to increase your profit is to up your prices. I know what you’re thinking: “But Tim, if I increase my prices, people will stop buying from me!” You would be right if you would increase you prices by 25%. But studies show that a 10% increase in prices will barely be noticed. Even when it is noticed, the drop in sales is negligible. When is the last time you increased your prices? Was it more than a year ago? What happened to your costs during that time? If you haven’t increased your prices within the last year, you need to up them now! Besides, the customers who won’t buy from you as a result are probably not worth keeping.

You also need to focus on your product lines (if you are a service company, think of your services in terms of products). Which product lines are the most profitable? Also, what is the turnover rate on each product? It may well be that you need to drop a product with a high margin because nobody has need of it. Focus your marketing on the highest profitability lines.

You must also ensure that your staff is working at full productivity. Is there room for anyone in your business to become more efficient and thereby take on more work? Are you performing tasks that don’t bring value to the business? What can you delegate to your staff so you can bring more dollars in?

These three areas of raising prices, focusing on your product lines and maximizing productivity, are just a few of many profit-building strategies you need consider. Ultimately, you need to take action now to make this your time of success.

Copyright © 2008 Kahuna Enterprises, Inc. All rights reserved.

Tim Dollmeyer is a certified ActionCOACH business coach. If you have questions or would like to learn about coaching, visit http://timdollmeyer.com/

As the world of business moves faster and becomes more competitive, having a Business Coach is no longer a luxury; it has become a necessity! Tim’s role is to coach business owners to improve their businesses using the proven systems provided by ActionCOACH coupled with his experience and yours. Tim will work with you to develop your vision and then get you into Action to achieve it.

Tim is a powerful and inspirational presenter who uses humor and audience participation to bring his point across in a way that will make a big impact on you and your business. Whether teaching business management, leadership or team building, Tim will help you to view your business in a whole new way. Tim presents workshops for every aspect of growing a business. Each program can be tailored to your company’s specific needs. He also delivers workshops in various areas such as conflict resolution, negotiating and public speaking.