Posts

Gaining competitive advantage – kick-start your business mindset

/in , , , , /by

Rising above the Stanley Park treelineAll business owners are interested in gaining competitive advantage, but it is difficult to rise above the pack with a durable competitive advantage.

Do any of the statements below describe you or the way you feel about your business?

  • I feel as though I am in a rut and going nowhere fast
  • I feel frustrated and become competitive with everyone
  • I am focused inward; I rarely get out
  • I wait to see the cards I am dealt and then deal with it
  • I don’t try too hard in my business relationships
  • I make decisions according to how I feel at the time
  • I have a set system and I do what I have always done
  • I have everything I need to know in my head
  • I get by and survive; that is the best I can hope for
  • I blame others for my problems and bad luck

Maybe its time for a change!

As a business owner you have chosen a path where your destiny is firmly in your own hands.  You have the power to decide whether your journey is going to be exciting and rewarding, or just a frustrating dead-end.  It is only through your decisions and actions that your future will evolve.

You are the driver of your business and its most valuable asset – YOU!   Your attitudes and values will always reflect in your business.  You are responsible for the quality of its product and service output.  You shape its culture and reputation.

The rewards will not come to you if you sit back wishing and procrastinating.   You must embark on your unique journey of discovery.  No one can take your journey for you.

One way or another, you must experience it for your self.  Not only is it a journey of external discovery, it is a journey of self discovery as well.  If you try, you will discover that you can do things that you never thought possible.

Open your eyes and open your mind to the challenge ahead.   Re-ignite your passion and enthusiasm.  The benefits make the journey worthwhile.  Your family will welcome you home as a much happier person.  Your employees will thank you for it because you will make their dreary work lives more exciting.  Most importantly you will feel fulfilled and self satisfied.

Contact me at http://www.garyweigh.com to kick-start or re-ignite your business journey and gain competitive advantage.

If you want to see part of my competitive advantage as a business trainer visit my aikido secrets blog at http://www.aikido-secrets-to-calm-success.com

If you are starting your own business or want to boost your existing business read my latest book Recession Riches and Wealth at:

http://www.garyweigh.com/recession-riches-and-wealth

Until next time!

Gary

Gaining competitive advantage – look at your gross profit

/in , , , , /by

So you thought Gross Profit was merely a line on your annual Income Statement.  You may be surprised to know that it is so much more.

There is no other line on your Income Statement that has so many business processes feeding into it.  Gross Profit is a financial barometer for your business.  Understanding Gross Profit could gain competitive advantage and more money for your business.

So what is Gross Profit and how do you calculate it?

In simple terms, it is Sales minus Cost of Sales.

Now let’s break these two concepts down:

Sales = Selling price per unit x Total number of units sold

Cost of Sales = Materials costs + Labour costs + Manufacturing costs + Distribution & selling costs

Therefore, gross profit is the amount of money left over after paying all costs directly associated with getting your product to market.

It could be argued that every single cost you incur is related to bringing your product to market.  Whilst this is true, it is desirable to split up your costs into two (2) categories:

  • Costs that can be directly attributed to the products and services that you sell
  • Overhead costs that not directly attributable to any particular product or service but are more related to being in business, regardless of whether you make a sale or not. (e.g. office rent, administration costs)

Why is it desirable?  This seemingly arbitrary splitting of costs becomes important when you have more than one product and / or service.  For example, attributing costs to product A and product B enables you to work out which product is more profitable.

Another way of looking at gross profit is – the amount of money left over from the sale of products and services to pay your overheads.  In the case of more than one product, it is essential to know which one makes the greater contribution to paying your overhead costs.

So when a financially skilled business coach performs a diagnostic review of your business, he or she is going to look at all the inputs and processes that go into developing the Gross Profit line.  Broadly, they are:

  • Price – your pricing strategy
  • Sales volume – your customer base
  • Materials costs – your buying, storage & inventory strategies
  • Labour costs – your human resource strategy
  • Manufacturing cost – your creation, assembly & technical strategy
  • Distribution & selling costs – your marketing strategy

Gross Profit reflects everything that goes into assessing demand, finding customers, communicating with them, creating your product or service, distributing and selling to your customers, and providing warranties and after sales service.

It also reflects everything to do with acquiring materials, recruiting and training people, safe processes, productivity, technical expertise and machinery to make the products and services sold.

So the next time you look at your Gross Profit line, remember that a good hard look behind the scenes will reveal a gold mine of information and gain competitive advantage.

If you are starting up your own business or want to boost your existing business read my latest book Recession Riches and Wealth at:

http://www.garyweigh.com/recession-riches-and-wealth

Until next time!

Gary