Starting a new year is stimulating for business owners and managers because you wipe the slate clean and start over.  Whatever the struggles were in the prior year, you have learned from them.  A new year provides an opportunity to make required changes to maximize performance.  If you sell services to your customers, you have an opportunity to impact profits this year by charging appropriately for your time and your quality.  If you have more than one product you sell, or if you sell a mix of service and products, you have an opportunity to impact profits this year by adjusting your sales mix. 

Selling Services

The market purchases services based on the value of your time and expertise.  If your company provides a service that gives your customer a high return or is unique to the market with little competition, you can achieve a higher price for your time.  Customers will pay for value – even though they may first fight for the lower price.  Hold your ground, and don’t undervalue your services.  If your services are a commodity, then consider what you can offer to increase the value – something that is tangible that your competition doesn’t offer.

Selling Products

The market purchases products based on competitive pricing.  If your products are deemed to be commodities, it will lower your price.  Most companies we work with have multiple product lines or services they provide, each one providing various levels of profit margin.  If they change the focus of their sales efforts toward higher margin products or services and can achieve similar sales volume, their bottom line increases with the same level of effort.  This doesn’t mean giving up on your legacy products or services, but it does mean you may need to change your mind set on what you focus on selling.  My first advisory client over 25 years ago was able to turn his company around financially by acknowledging that the high end product he was most proud of was providing the lowest profit margin and highest effort.  When he accepted that he was more interested in profit than sales volume, he changed his focus and his results.  Within one year, he turned his losses into profits. 

Don’t settle this year for what you have always done.  Use your skill to evaluate and then embrace the opportunities you have in valuing your services, and changing your sales mix to positively impact profitability.