How can you make more profit? The Parsnip says you have only seven options:
Price up – experiment with different amounts and see what happens, try it on different segments for less risk and more information, make small changes but keep going.
Add value – don’t be a commodity or it’s only about price, make yourself different in some way
Reduce costs (but be careful it doesn’t affect service, lead time, or quality, which it usually does)
Sell more – find a way to get more repeat sales, maybe employ more or better sales people, and study and refine your sales process
Negotiate – over changes to orders, prices, costs when you buy materials or services, so you get the higher prices that some (or most?) of your customers would be prepared to pay, and which you are losing out on at the moment.
Identify and get rid of unprofitable customers – it starts with working out who they are, but even if you don’t know you can be sure that some of your customers only break even, and some are loss-making when you take into account how high maintenance they are – management time is expensive. (Put your prices up and either they will pay or go, and you win either way!
Play the game to simulate what would happen if you made changes to quality, resources, service, lead time, and price. What’s the best combination?
onwards and upwards!