What Is Your Profit Center?

Jan 4th, 2009 | By | Category: Marketing Professional Services, Practice Building With Backend Sales

Have you ever stopped to think about where you make your money? Do you sell consulting services, or are you in the product business? Do you really know?

Of course you can look at your sales register and identify the categories your revenues are allocated to … X% here, Y% there, and so on. But stop for a moment and think about a couple of things. what does the man with the hot dog cart need? He needs a horde of hungry hot dog aficionados. What does the guy who goes into the store looking for a shovel want? He wants a hole. Have you ever thought that maybe there should be a way to categorize your sales by needs fulfilled rather than item or service?

If you read much about marketing of services, you’ll constantly come across marketing advice telling you about the importance of discovering what your customers needs are and planning on filling those needs. They even tell you how to fill those needs.

But, it seems to me that most of the sales and marketing tracking advice you see is woefully weak in showing you how to tell if you have identified the proper need and if the client has had that need actually filled, either completely or in an ongoing and satisfactory manner.

Take the Hubert, the typical small business accountant or bookkeeper, for example.

Day in and day out Hubert toils at this desk creating powerful and accurate financial statements for Ralph the Painter, or Suzy the Seamstress, proud of his handiwork and ready to advise Ralph and Suzy about how to improve that bottom line.

Ralph and Suzy could care less.

What do Ralph and Suzy want? Ralph and Suzy only want one thing. That want Hubert to keep the IRS out of their pocket.

Neither Ralph of Suzy cares a hoot about what those perfectly formatted and accurately balanced financial statements have to say, or what their sources and uses of cash are. Ralph and Suzy know what their profit is. They have it in their wallet or purse, and that’s where they want it to stay.

Sure, every now and then they need some sort of loan, but it’s usually not something that they need an accountant to help them with. Maybe it’s a new truck or maybe it’s a new pattern cutting table. It’s certainly not a triple-tranche line of credit with compensating balances secured by stock and accounts receivable.

By knowing what your clients or customers needs really are, you can identify where your real profit center is and begin the analytics so necessary to building a successful practice.

Go for it.

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