How to unlock hidden profitability (OPINION)

by Talk Business & Politics (admin@talkbusiness.net) 13 views 

Within your company there are tens of thousands, maybe even millions of dollars of unrealized profitability locked up in legacy processes, outdated technology or undersold customers.

I call these untapped pockets of opportunity “underutilized assets,” and they come in many forms. One of your most important tasks as a leader is to identify these underutilized assets and find ways to put them to better use.

This is not an easy task because we are all busy with our daily activities and frequently so buried in our way of doing things that it is hard to see objectively. That’s why so many companies hire consultants. A fresh pair of eyes can make you a lot of money.

Despite the difficulty in identifying these underutilized assets, it isn’t impossible. With some dedicated time and effort, you and your team can unlock these untapped sources of profitability with what I call a hidden profitability audit.

 

People

Sometimes they’re in the wrong job, using outdated processes and technology or incented based on things that don’t matter.

List the 10 things they spend the most time on, and rate them high to low based on how much revenue they add. Chances are only two or three items are really revenue generators. Most everything else can be eliminated, outsourced, automated or consolidated.

Match incentives with what people spend time on and believe is important. Are you incenting the right behaviors and actions? Is your incentive plan doing what you want it to do?

Evaluate the processes employees use in light of available technology, people and customer experience. There’s always a better way.

Identify the proven thought leaders in your company. Are you turning them loose to solve critical problems?

 

Customers

Do your customers know all the services you provide, and all the ways you can help them?

It is not the customer’s job to figure out what you sell and how it can help them.

Countless sales opportunities are lost because a sales agent never takes the time to fully understand the customer’s situation and ensure he or she has a good understanding of what the company can do for them.

Who are your most profitable customers, and how can you profile them and leverage these relationships to develop more like them? Who are your most valuable referrers, and how can you develop more like them?

 

Technology and Tech Vendors

 What technologies do you currently use, what do you use them for and how well do they fulfill your desired purpose? 

The company providing your technology should update it regularly and keep it leading edge, not treating it as a cash cow. How effective is their service to you?

They should help you utilize their technology to its fullest capabilities. What features are you not using? What processes can it support that you are not using it for, and what marketing channels can it support that you are not using it for?

How helpful is your website to customers, and is it integrated with your marketing, ordering and customer service systems?

Strategic partners often have core competencies you need but don’t have to hire full-time. Taking advantage of them can mean the difference between market dominance and out of business.

Hidden profitability is your enemy, and chances are good your bottom line can be significantly increased by carefully examining these areas, as well as others unique to your company.

Your top performers will be able to provide you with great ideas for improvement, and a fresh set of eyes from outside your company can help you see the hidden profits you might be walking past every day. 

 

Scott McClymonds owns CEO Velocity coaching and consulting and Office Pride commercial cleaning, both in Fayetteville. He can be reached at 479-263-0774, scottm@ceovelocity.com, or scottmcclymonds@officepride.com. The opinions expressed are those of the author.

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