How can I become more profitable?

There are five areas of the business where we can make improvements that can improve financial results: Cash Flow, Sales & Marketing, Overhead / People, Operations / R&D, and Raising Money.

Four Rules of Profitability:

  1. Maximize revenue per unit
  2. Minimize variable costs 
  3. Minimize fixed expenses
  4. Maximize throughput of system (prioritizing most profitable offerings)

Amplify Methodology-2

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    Guiding Questions (fill in the blank with tactic):

    • If you were going to _________ right now, where would you start?
    • How have you found ways to _________ in the past?
    • Who in a business/industry similar to yours would you be able to ask about _________?
    • How could we inexpensively and quickly test _________?
    • When can you commit to testing _________, and how will we know if it’s working?


    Diagnosing:

    • What are the symptoms being experienced? (Capacity Guidance section?)
    • Which area of the business is having issues? 
    • What levers do we have to improve the cash health of that area?
    • What action steps can be committed to that should improve results?

    Tensions in Maximizing Cash:

    • Increasing Cost of Sales to increase Throughput
    • Timeline to breaking even on a decision
    • Minimizing Fixed Period Costs at risk of burning out team or exhausting capacities
    • Increasing price at the risk of decreasing Throughput (supply + demand at work)