Move Into Profit – How?

Concentrate on Profitable Activities - Eliminate Loss Making ones

Three Simple Steps
·  Identify the profitable products (and the losers).
·  Re-organise the business around the profitable products
·  Eliminate capacity wasted on unprofitable products   

Identify the profitable products
The key issue is accurate costing. Normal accountancy procedures often cannot distinguish between the losers & winners. It is extremely common that products & services, thought to be profitable activities simply are not.   
·  We apply “text book” activity based costing methods to clearly identify the winners
·  You do not need to be a big corporation to use these methods
·  We use our proprietary software tools to make the task quick and easy to perform.     

What to do about unprofitable products
·  Raise the price to make them profitable – difficult to pull off, especially in a recession
·  Improve your operation and make them profitable at current prices – This is the
  conventional focus, rightly so. However, it is a long haul and you may not be around to   
  reap the benefits
·  Withdraw the products - stem the losses.   

Reorganise around profitable products
When you know exactly what is making you money, it is far easier to see what resources are required to support this. You need to reorganise in order to make the gain.
We reorganise the operation around the profitable elements, using only those resources that are absolutely necessary.   

Eliminate capacity wasted on unprofitable products.
We now know what makes you money and you have reorganised the operation to suit. The question is what do you do with those parts remaining? In good times, these would be regarded as valuable resources freed up for business expansion. In a more difficult climate, the costs must be supported by profitable activities or eliminated. We can support this process with assistance in Product Development and Professional HR Services.