Thinking More Profitable Not Just Revenue
There’s such a thing as “too much information,” especially for the companies scaling out their sales operations. As a business owner myself, I’ve had the privilege to work with so many businesses in different niches. The only factor separating what society considers a successful business is a REVENUE. What was the difference between a business generating $10K per month vs. the 7 figure per month business? Truth is not much. They both require the same fundamental factors to grow. Product/Service – Audience – Marketing Strategy (PAM)
So Why Is One Generating More Revenue?
The frequency of sales for the type of product/service and price. Simple as that. For example, let’s look at two businesses both selling quilts. Same materials used, the exact cost for materials, same $10 to ship the quilt. One is selling for $100 per quilt the other is selling for $50 per quilt. You can not assume that the $100 per quilt business generates more revenue based on price alone. If the frequency of sales is only 10 per week and the other company is 30 per week, the $50 quilt business is generating more revenue.
Knows your numbers in business. – Sabrina Kane
The cost for one quilt is $15 wholesale, the cost for shipping is $10 a quilt. So who is more profitable vs. generating more revenue? Focus on PROFITABBILTY NOT REVENUE.
I’ll let you do that math….. (the answer is BOTH businesses are profiting the same amount, $750). Revenue – all expenses = profits.
In the beginning, we had the $50 quilts selling 30 per week = $1500 and the $100 quilts selling 10 per week= $1000
So the question is, WHO IS MORE PROFITABLE? The $100 company has $75 in profits per quilt vs. $25 per quilt.
FOCUS ON PROFITABILITY, NOT REVENUE!
SCALING: If both businesses automated the flow, the $50 company would not have a chance to keep us with the $100 business period! Profit margins are much lower.