Profit, profit and more profit..how do we get more? The reason we are in business (unless we are a charitable organization) is to make money. Isn’t that why we do what we do? So how do we get more of the green stuff to show up in our bank accounts?
There are a few easy steps. We will go through them one by one during the next 4 posts.
First strategy: Increase the price for our service. In other words review your current pricing structure and raise prices where you can. Are you kidding me? Not in these economic times you say! Well the truth is, if you are not making money on the accounts you have, you will have to take some action. Either raise your prices to a profitable level or you could be looking at risking your business. You won’t be able to operate at a loss on even a few accounts before you find it difficult to meet payroll and pay your bills.
For janitorial companies, an annual price review can be into your contracts. Most accounts will not put the contract out to bid because of that.
For residential companies, quoting at a higher price can start with new prospects calling in for estimates. Gradually you will see your bottom line increase as your new rate take affect.
As for your existing residential clients, you will want to roll out the increases in small quantities depending on how many clients you have. No more than 5-10 at a time will give you an indication of how well received your new pricing will be. If you lose all of them, then perhaps your price went up too much. In some cases you may want to speak with clients who have been with you the longest in person.
Time to analyze your numbers and determine steps you must take to increase profitability. That’s the first step!