While profit is obviously critical to any business, it is often simplistically depicted as the result of maximizing revenues and minimizing expenses.
However, companies often wrestle with the challenge of determining what expenses are critical to making their revenues, and which ones can be spared without affecting the top line.
One book on profitability demystifies profit creation.
The Art of Profitability, by Adrian Slywotzky, demonstrates that profitability is achieved through the appropriate choice of business strategy, or business model, if you prefer.
Through the engaging parable of a strategy veteran coaching an aspiring strategy professional, Slywotzky covers 23 common and not-so-common “profit models.”
The Customer Solution Profit model, for example, is when a company invests significant up front time and energy to learn about a customer to develop tailored solutions just for them. These then generate ongoing profits for a long time after.
Multi-Component Profit is where the same product is sold to the same customers through different channels at different prices to maximize profitability (eg. Coke).
The key message is that profit creation is an experimental art rather than a certain science. But it can be learned and practiced. The story also vividly illustrates effective coaching of strategic thinking, or of any other skill.
Book: 272 pages, full audio - 5 hours 36 minutes. Soundview Summary: 4 pages, 16 minute audio.
How can you improve your profitability?
To find out how to improve your profitability to grow more easily, quickly and profitability, AND enjoy the ride, try our complimentary Agile Growth Checklist. This self-service questionnaire takes 5 to 10 minutes to complete. You'll receive the checklist with your responses immediately. Within 24 hours, you'll receive a compiled report highlighting areas to improve. Complete section 5 to check your profitability management practices. Or complete all 7 sections to find out how your company is doing in each of the 7 areas needed to produce more rapid, profitable and sustainable growth. This report is complementary and involves no obligation.
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