Tuesday, 31 March 2015

In the Non Profit Sector but shouldn't be...?

Of course there is a place of the Non-Profit Sector - government Departments and Charities for example...

Some of the most credible work and contribution to society is delivered by organisation in the Non-Profit Sector...
However, there are plenty of Companies that are also "Non-Profits" and they shouldn't be...

How to make a Profit...

The system is really simple - there are two main types of profit that can be made in a Business...
  1. Gross Profit - buy something for £10.00 and sell it for £20.00...

    That is a Gross Profit of £10.00...
    From a Mark Up of 100%
    Giving a Margin of 50%
  2. Net Profit - as long as all the bits of Gross Profit equal more than your running costs you have made a Profit.

    So if your monthly "overheads" are £100,000 and you sell £250,000 at 50% Gross Profit (£125,000...) you have made £25,000 Net profit in a Month...

    Do that every Month and you'll make £300,000 Net Profit in a year; Simple, what is all the fuss about...?
If it is so simple, how come so many companies don't make a Net Profit at all, and so many remain in the Not-For Profit sector unintentionally...?
Because there are a few more Rules that apply to the game of Business that they either don't know, or choose to ignore...
  1. Problem - do they actually solve a problem for people, is it something that has value in the market...?
  2. Quality - can they deliver the product or service at a consistent level of quality, such that reputation can be built...?
  3. Uniqueness - do they "stand out" so that price is not the only differentiator in the buying decision...?
  4. Relationship - can they build long term relationships with clients, suppliers and employees...?
  5. Sales - are they good at Marketing and Selling; having a great product or service simply isn't enough...
  6. Vision - is there clarity of long term Vision and Leadership for the future of the business - that engages people and excites the owner...?
When I see a company that is struggling with Profits - it's usually because one or more of these Rules are being broken.
Profit is a symptom of a great business; it is simply the consequence of a series of events and processes working together...
So, if you are in the Non-Profit sector, but shouldn't be, simply check your business against the Rules of Business and look for the gaps...

AND....

If you'd like to buy my Book - Your Business Rules OK - the 8Rules to building your remarkable business...

Simply Click HERE..

About David Holland

I work with Business Owners, Executives and their Teams to:
✔ Make more Money in their Business...
✔ Build Effective and Productive Teams...
✔ Work Less Hours and enjoy the Journey...
✔ Grow Sales, Profit and Cash...
✔Inspire them to Achieve more than they think is possible...
To find out more about how I can help you, send me a connection request on LinkedIn, or send me a message if we are already connected
To find out about our Events and Workshops in Luxembourg and the UK, click on the LINK...
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