Dreams Don't Pay Bills

mindset Mar 30, 2021
real estate investment


Fat Margins Do.


Ever wonder why some companies like Google, Starbucks or Facebook are able to provide such fantastic work environments equipped with trendy offices, the latest gadgets, and incredible benefits for the staff? It’s because the business is designed to make money. Shocker I know.

I recently met with a client that has been in business for nearly 40 years and he said it best:

“No Margin = No Mission”

An entrepreneur can only grind it out for so long and “live in their parents’ basement, eating kraft dinner” before they run out of steam. A business without enough upside isn’t much of a business and often leaves the owner in a self-perpetuated job.

Here are a few pointers to help beef up your margins and your profits.

▪ How long does it take for your client to recoup their investment in your product or service?
▪ How does that compare to the industry?
▪ Know how you differ from the competition.
▪ Demonstrate your pricing as a function of savings or return on their investment in your product or service.

You already have your client’s attention and any new product or service you sell
them cuts your cost of acquiring that customer. What other complimentary product or service could they benefit from? If you’re not cross selling you are missing out on one of the most powerful ways to introduce value add high margin products.

You know what a client costs you to acquire.
Work this cost into your pricing, create an incentive program and work with your existing vendors and partners to expand to drive sales. Many companies have consistent fixed costs so any significant boost in sales generally translates
into a much healthier bottom line. A healthy gross margin is a wonderful thing.
It allows you to create infrastructure and bring on a proper support system to service your clients and free you up to work on the business rather than always working within the business.

A strong gross margin allows you to scale, take on more business and create fantastic efficiencies within your company. Best of all you’ll be on your way to building a business that others will want to buy.

Entrepreneurs get into business because they see a gap they are willing to fill. Whether it’s to be of service to people, improve upon an existing product or challenge how business is done. Whatever the reason for your burning desire to start, build or expand a business; there needs to be enough margin to execute the mission.


To Your Success,

Marcin Drozdz

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The information contained herein is for general guidance on matters of interest only. This information contained herein are not intended to provide you with any advice on financial planning, investment, insurance, legal, accounting, tax or similar matters and should not be relied upon for such purposes. www.marcindrozdz.com is not a financial or tax adviser. You should assess whether you require such advisers and additional information and, where appropriate, seek independent professional advice. www.marcindrozdz.com, its subsidiaries and affiliates, are not responsible in any manner for direct, indirect, special or consequential damages however caused arising from your use of the information contained herein.

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