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Profitability, Productivity and Pricing

Every business that wants to improve its bottom line needs to concentrate on the three Ps:

Profitability, Productivity and Pricing

Profitability

Profit = sales – costs.

Simple.

And because it’s simple, there aren’t too many levers you need to pull to improve your profit.

  • Sales revenue – you can change the amount that you sell and the prices you charge
  • Costs – you can use less, pay less for what you do use and get more out of every £ you spend

 

Productivity

Productivity is a measure of your output divided by the cost of the inputs. Again, simple.

  • What were your sales over a period divided by the costs of producing what was sold?
  • How can you increase productivity going forward so that every £ you spend makes you more money?

 

Pricing

Pricing is fun, scary, important, imperfect, variable, too low, informative, too high, vital, uncomfortable.

Pricing is a moment of truths – but do you interpret the signals pricing sends and do you have the confidence to test different prices?

 

Profitability, productivity and pricing. They’re all linked, they’re all simple to understand and you can change them all over a period of time to improve your bottom line.

But.

Your efforts will be held back if you don’t have accurate, up to date management information about business performance. Unfortunately, too many businesses either don’t have or don’t use the information they need to understand and improve PPP.

 

How we can help your business with PPP

PPP one to one

This comprises two half-day sessions where we look firstly at the management information available to you, how it’s being used and whether it can be improved.

Then we look at how each element of PPP is working in your business and discuss practical ways in which you can improve Profitability, Productivity and Pricing.

These sessions can take place at your office or ours and the price is £900 plus VAT payable in two sums of £450 before each session. All prices are exclusive of VAT.

 

PPP workshops

These are limited to six MDs per workshop and require some “baring of your soul”.

We work through each element of PPP in a case study but after each section we look at two of the businesses in the room and discuss their Profitability, Productivity and Pricing.

This works because as well as running businesses of their own most of the attendees will have been customers of a business like yours and will be able to offer objective and constructive feedback on PPP improvement.

There’s nothing quite like getting constructive feedback from your own market!

PPP workshops are half-day sessions and the price per attendee is £100 plus VAT, payable in advance.

 

Interested?

Email us to discuss a PPP one to one session or to join in one of our up and coming half-day sessions. Or give me a call on 020 7125 0270.

To find out  more on how we work with clients to increase their profitability, visit our Services page.

 

Michael
@diaryofanomb
Sales | Margins | Profit | Cashflow