Pin It

Who is DP100 for?

DP100 is designed to help you optimise an existing business.

We are aiming to streamline what you have, thereby directing more money to the bottom-line Profit. This is simpler than increasing revenue and can happen much faster.

  • It would be wasteful to focus on Revenue first if the business is not as efficient as possible already. That would mean missing out on maximising the profit from the increased revenue.
  • If your business has any age and complexity, it may have developed some less productive 'barnacles' throughout its operation and have a number of 'leftovers' from earlier profit growth drives.
  • Many of these will be draining money, management attention and probably morale.

First step: prune out Resource Wasters.

This includes getting you and your team as efficient as possible.

Then you can focus on a future profit growth drive.

Is DP100 even possible?

The natural sceptic in us is probably a bit affronted at the thought that the business we have been running all this time is even capable of much profit improvement; let alone a doubling.

We can’t tell you how much extra profit you will make from following this Profit Savvy Menu, every business’ circumstances will be different.

The Case Studies following will give you some idea of what might be possible.

Case Study 1

Figures for a small business.

Assumptions:

  • $1 million in Revenue - improve this by 5% (5 cents for every current dollar) - not a big ask.
  • $250,000 in Variable Cost - reduce by 5%.
  • $580,000 in Fixed or Overhead Costs - reduce by 5%.

Profit = $170,000 - increases to $261,000 after improvements.

54% increase in Profit. Not too shabby!!

If we increase the improvements to 10% in this example, the profit improves by 108%!

Click through to the FULL ARTICLE for a PDF of the data worked in a spreadsheet - DP100-Profit-Improvement-Calculator

Now it's your turn!

The link to download both the PDF and Excel spreadsheet are in the FULL ARTICLE.

Substitute your own information from a recent annual accounting report and put in the percent improvement you think might be possible.

Chances are that you can boost your Profits.

Case Study 2

Let's use a simple hypothetical case study to demonstrate how all the steps we will cover can add up.

Assumptions:

  • $1,000,000 in Revenue
  • 5% Profit before Tax = $50,000.
  • Costs are 95% of the sales = $950,000.
  • Labour, typically 60-70% of costs = $480,000.
  • Fixed costs = $235,000.
  • Variable costs = $235,000.

 

Activity

Assumed improvement

Amount improved

Additional profit %

Product range reduction

5 loss making products out of 20 are dropped from the range saving $2,000 each.

$10,000

20%

Location reduction

1 warehouse dropped at $5,000 p.a. rent

$5,000

10%

Variable cost

5% quantity discount on 20% of inputs

$2,350

4.7%

Fixed cost

No improvement

0

0%

Labour

1 store man dropped when warehouse closed $30,000

$30,000

60%

Relieve constraint

Say 10% improvement in production throughput. $100,000 in revenue @ 5% profit margin

5,000

10%

Sale surplus capacity

Say 1% of turnover $10,000 less variable costs of $2,350

7,650

15%

Inventory run down

Once off improvement of $60,000. Not counted as not repeatable

   

Improved sales

Say 10% improvement in sales revenue @ 5% profit historically. $100,000 @ 5%

$5,000

10%

Smarter Pricing

Say 1% improvement in pricing on $1m in revenue

$10,000

20%

Totals

 

$75,000

150%

 

From this realistic example, profit went up by $75,000 which is a 150% improvement over the $50,000 present profit.

Did any of these steps seem particularly difficult?

Might they reasonably be identified and started in the first 100 days of DP100?

We encourage you to use this template to estimate your own profit increases from putting this plan into motion.

If the results look promising you have:

  • set yourself a minimum goal of beating what you have quickly worked out and
  • reassured yourself that it might be possible and therefore worth making the effort to try.

Go to the FULL ARTICLE for further Case Study examples - Factories, Offices and Retail.

How Much Time will it Take?

We are all short of time and always looking for the priority for what time we do have.

The good news is this - DP100 is entirely self paced, it can take as much or as little time as you like.  

The actual sequence of events is not too important either.  We actually encourage you to do the bits you like first so you start to build up a bit of interest and speed.

You do this at your own speed but, given the goal is more profit, its a process that probably is worth your attention.

A by-product of DP100 is that it is laser focused on reducing the problem areas in your business. 

These are the ones you are always fire-fighting, using DP100 to get rid of them automatically gives you more time in your life.

Ready to give it a shot?

Step Through

We have arranged the items in the Menu in the order that we feel flows the best. 

You can of course change the order in which you apply these tasks to suit your circumstances but quite often a method of improvement is ideally preceded by some earlier step.

This Program is about quick ways to improve the profit of your existing business.

DP100 is divided into several articles, these are:

 

Click for Full Article

 

Watch The Video Now

Spencer Lum talks about one of the worst pricing assumptions people make and then gives 3 strategies to increase price

Listen to the psychology of pricing - excellent video.

 

 

Watch this eight minute video
on the link below

3 Pricing Strategies Everyone Should Know

 

More on Profit Savvy

ProfitSavvy.org is a Not-For-Profit that distills the best available profit growth tips from leading authors and presents it to you in an easily digested format. Save the expense of buying books and the huge amount of time required to wade through them with ProfitSavvy.org

 

Got You Interested

Sign up now for thought provoking free tips on making your small business perform better and more profitably.
Drill down further on interesting topics at your convenience later.

Subscribe Here

 

Tell Us What YOU Want

We want these Tips to address the things you want to know more about.  Please suggest topics and provide any FRANK feedback you want to This email address is being protected from spambots. You need JavaScript enabled to view it.

 

Pin It