The #1 Profit Driver Consultants Should NEVER Neglect
Profit drivers for consultants are highly important to sustain the growth of the firm. Are you aware of the critical factors that drive profitability in your firm?
Many consultants don't realize the importance of having a profit strategy. When you implement a detailed profit strategy for your firm, you will never have money worries again.
In this episode, I will identify why a profit strategy is essential, and the most critical profit driver you should track and improve consistently.
When creating a profit strategy, be prepared to establish, monitor, and improve critical components consistently.
Out of all of the components that you should include in your profit strategy, the most critical profit driver that consultants should never neglect is pricing.
Pricing impacts your firm, which is two to three times greater than any other profit driver.
As a matter of fact, every additional dollar you earn when you increase your services and products' prices go directly to your bottom line.
Pricing is not only a profit driver, but it also impacts how your clients perceive your brand.
You can position your brand as a luxury brand, a necessity that your clients shouldn't do without – OR – as a low-cost brand.
Which do you prefer? Let me know how your current prices represent your brand.
When developing the pricing component of your profit strategy, I want you to remember the following:
- You should price your services and products for profit.
- You should include all of the direct cost and overhead in your price and a profit margin percentage.
- If you have low margins, that is a clear indication that your prices are probably too low, meaning they are not priced for profit.
- Remember that pricing your services and products for profits has a more significant impact on your bottom line than increasing sales volume or reducing cost.
You see, you can increase your sales volume by finding new clients.
– OR –
You can slightly increase the price of your current client and generate more profit.
You may now be wondering about decreasing your cost. You can reduce your cost, BUT will your company continue to operate effectively and efficiently?
That is the cost-reducing challenge that many consultants face because they are not strategically decreasing their cost.
One of the main strategies for providing virtual CFO services to consulting firms is to ensure that your profit drivers are increasing month after month.
Let me know in the comments your pricing struggles and questions.
If you would like to chat with me about CFO services, contact me today at OctaviaCFOChat.com
This is Octavia Conner, the Million-Dollar Virtual CFO, and CEO of Say Yes To Profits.
Until next time Say Yes To Profits!
Are you ready to Say YES To Profits?