A Goal-Oriented Philosophy

Profit success is defined by whether or not our annual profit goals are met. I think one of the goals of an entrepreneurial business is to beat the big competitors in the profit margin game. This is the goal that creates a valuable company, and this should increase exit options for you. Your CPA should be able to provide you with industry benchmarks, and if they cant, youve got the wrong CPA. The whole profit game is one with which you need to be very careful. One way to reach this profit goal in the short term is by raising your prices, but if you do so, you must do so with caution. As a result, you may see an increasing customer attrition resulting in long term profit erosion . Remember, profit dollars are much more spendable than profit margins! If you travel this route, you better ask yourself or your leadership team: What increasing value are we providing our customers in return for asking them to pay us more money? If you cant easily answer that question, I think you are setting yourselves up for failure in the long run. The American consumer is just too smart to accept higher prices without corresponding higher value.

Our goal as a company remains focused on adding more satisfied customers every month. We feel we need to attract more customers with our great prices, and then retain them with superior customer service. If we provide greater value than our competitors, hopefully we will earn the right to deserve a higher price, and thus, higher profits.

Every business owner should be thinking about businesses all around them that command higher prices, resulting in higher profits. Try and bring this way of thinking back to your own businesses. For example, ask: How does Lexus get such a high price (and the resulting high profits)? And why cant Ford do the same thing? If you cant answer that question, talk to people. Walk into a Lexus dealership and talk to the sales people. Talk to Lexus owners on the street. They will gladly tell you, and tell you with pride . Then get over to that conference center with your leadership team and ask yourselves how you can be the Lexus of your industry.

Remember, customers make buying decisions based on their perception of value and great experiences, not just by looking at price. If you increase the value or give them a better experience than your competitors, your customers will gladly pay more. And you will gladly enjoy the profit increase. Most importantly, you will have earned it.