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What is customer service?. Who is your most important customer?. Everyone matters! Hey, it could be Dale!. 10 “Secrets” of Profitability. How important is profitability??. By focusing on revenue , you will not automatically receive profits What?!? Hasn’t this been our focus Dr. K?
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How important is profitability?? • By focusing on revenue, you will not automatically receive profits • What?!? Hasn’t this been our focus Dr. K? • Maximizing revenues does not mean that you are maximizing profits. • Happiness is a profitable business with a positive cash flow!!!!!!
1. Focus on costs, to increase profits • Improving profits by $10,000 is the same as increasing sales by $200,000 or reducing costs by $10,000 • What are some areas to look at to reduce costs • Advertising • Communications • Benefits
Other areas to examine • Insurance • Overtime • Every expense needs to be gone over
2. Focus on customer service • Always, always try to exceed your customers expectations! • Do a customer satisfaction survey. • Customer service starts to when the customer calls in till the product is delivered. • How to deal with an irate customer.
3. Get great employees • Employees are the key to any business • Forget about training and hire for character, motivation, and people skills • If an employee or a customer gives you a headache, then get rid of them. • Great employees will make your job easier and better. • Pay employees as much as you can, within reason.
4. “Incentivize” each and every worker • People work harder with incentives • You get congruence with goals of business and worker • Less management • Work is more fun with incentives • Incentives do not have to be money
5. Work smarter, not harder • Burnout happens to business owner who think they can work harder and harder • Economic reward system is not for labor but for smart work. • Use your mind to figure out how to work smarter. • Definition of insanity… • Make sure you work more on your business rather than in your business
6. Watch your marketing expenses • More money is wasted here than anywhere else. • Develop a marketing plan • Set goals that you need to make with sales • Limit advertising expenses to between 3 to 5% of your revenue. • Make advertising, outcome driven. • Be proactive with advertising. • Watch yellow page expenses • Ask your customers if there is anything additional that you can provide them(chicken example).
7. Find a mentor • Mentors do work- why? • How do you find a mentor? • Most people are honored to be a mentor! • Only cost is an occasional meal • If you try this, I guarantee that you will love this.
8. Do not compete on price • If you can avoid competing on price, you are better off (but this is hard) • Compete on quality • Compete on service • How to price your product
9. Understand financial statements • What is the purpose of these things? • How important are these statements? • How to read the statements? • You can master this!!!
10. Take vacations!! • Avoid burnout • Examples of entrepreneurs who did not take time off... • Take long vacations • When you forget what day it is, this is a fine vacation...
Quick Review • Focus on costs • Customer Service • Find great employees • Incentives for workers • Work smarter, not harder • Marketing direction • Find a mentor • Do not compete on price if can • Understand financial statements • Take vacation
Entrepreneurs are the people that make our country great!!!!!!!!!!!! Thank you for letting me be your professor this semester!!