Mar 07, 2023 What is the Best Way to Improve Profitability of Your Business?
That’s a great question. I am asked this question all the time. Unfortunately, there is no one answer. A better question is, how can I find out the best thing(s) to do to improve the profitability of my business. I have worked with over 100 companies to identify what the most effective things they should do to improve profitability and what impact they should expect. In fact, I developed a unique process called The Apollo Profit Acceleration Technique™ just to answer this question. It breaks down to three steps:
1. Firstly, develop a detailed financial model of their business and perform sensitivity analysis (basically a series of what-if scenarios). This is a lot of work because you have to understand everything about the business-the costs, the products or services, the prices, their interrelationships, etc. This process identifies the key drivers of financial success.
2. Next, these are ranked by the possible impact on profitability and then grouped into those actions that we can control, the ones we can affect and the ones we cannot control. Out of this I recommend strategies to actuate the results that we need and then develop an action plan to carry out the most promising changes.
3. Finally, we put in place detailed measurement to provide a guide if some of the actions don’t have the impacts we were looking for. We need to be able to understand why something did not work and have the instrumentation to make adjustments. We can’t just wait around and see if profits go up.
The Apollo Profit Acceleration Technique™ is the fastest way to identify and actuate the profit potential of any company. Typically, the process results in a 20% to 40% improvement in profitability for a company that is decently well run. When they have lots of issues, I have seen improvements in profitability as much as 700%.
If you want to improve your company’s profitability, give us a call at (401) 862-6339.
Bryan B Mason
Apollo Consulting Group, Providence, Rhode Island