Sell More or BuyMax?
by Rebecca Cassel
June 8, 2010
Benjamin Franklin once said, “A penny saved is a penny earned.” Is this really true?
In the game of business, there is an easy equation that is used on our Profit and Loss Statement that tells us how much profit we earn each month and each year. You know that Sales – Expenses = Profit. In the simplest terms, to earn more money we either have to increase sales or decrease expenses to drive more profit dollars.
Which is easier to do?
To keep the math simple, if you wanted to produce $10,000 more in profit and you were currently generating a 10 percent net profit on your sales, you would have to sell $100,000 in products and services.
Chart 1 illustrates that the sales necessary to generate an additional $10,000 in profit goes up dramatically per the less profitable you are as a percentage of sales.
To increase sales, you must have marketing that works, a staff that answers the phone correctly to book the call, and technicians who are productive and can produce revenue on those calls. You must also ensure that you do this in a manner such that the customers’ expectations are exceeded and they will use your company again and again. There is a lot of work that has to be done to generate more sales, and associated costs of sales. While increasing sales is always worthwhile and necessary, it is tough sometimes.
Astute contractors work both sides of the equation — increase sales and decrease expenses.
SAVING MORE
While saving money (decreasing costs) will take some effort, it is not as complicated as generating sales. Every dollar reduced on the expense side has a direct one-to-one correlation on the bottom line. To decrease expenses, you must look at each line item on your P&L statement, and figure out ways to drive those costs down.
One easy way that many BuyMax® members utilize is to negotiate more effectively with suppliers, or use a Purchase Order System to ensure that management is authorizing the purchases to control spending, or shop your vendors annually for bids on insurance, group benefits, credit card fees, and office supplies.
The larger volume that you do, the more leverage you have with your suppliers and vendors to give you best pricing, discounts, and great terms.
The challenge today is that most contractors don’t have a lot of leverage to buy like a large national company. So how do you buy like a billion dollar company?
You band together with your fellow contractors and buy as a group. Joining a buying group gives independent dealers not only the purchasing power needed to compete in today’s marketplace but access to leverage. Buying groups provide negotiating expertise, analysis on pricing, and best of all, clout. That is why over 1,400 contractors have united under the BuyMax umbrella to buy like a billion dollar company.
These same contractors also have direct access to a knowledge base not normally associated with a buying group. As you well know, knowledge is power. An informed contractor makes better purchasing decisions resulting in more profit dollars.
More importantly: buying group membership is focused on increased profits for its members and not a lot of add-on fees or sales pitches. You will see a healthier bottom line — guaranteed. Check out Chart 2 to see what a difference saving from $10,000 to $45,000 in purchases can have on your profit percentage.
You can take advantage of this new initiative by visiting www.buymaxalliance.com or e-mail savemoney@buymaxalliance.com for a free 90 day trial.
One easy way that many BuyMax® members utilize is to negotiate more effectively with suppliers, or use a Purchase Order System to ensure that management is authorizing the purchases to control spending, or shop your vendors annually for bids on insurance, group benefits, credit card fees, and office supplies.
The larger volume that you do, the more leverage you have with your suppliers and vendors to give you best pricing, discounts, and great terms.
The challenge today is that most contractors don’t have a lot of leverage to buy like a large national company. So how do you buy like a billion dollar company?
You band together with your fellow contractors and buy as a group. Joining a buying group gives independent dealers not only the purchasing power needed to compete in today’s marketplace but access to leverage. Buying groups provide negotiating expertise, analysis on pricing, and best of all, clout. That is why over 1,400 contractors have united under the BuyMax umbrella to buy like a billion dollar company.
These same contractors also have direct access to a knowledge base not normally associated with a buying group. As you well know, knowledge is power. An informed contractor makes better purchasing decisions resulting in more profit dollars.
More importantly: buying group membership is focused on increased profits for its members and not a lot of add-on fees or sales pitches. You will see a healthier bottom line — guaranteed. Check out Chart 2 to see what a difference saving from $10,000 to $45,000 in purchases can have on your profit percentage.
You can take advantage of this new initiative by visiting www.buymaxalliance.com or e-mail savemoney@buymaxalliance.com for a free 90 day trial.
Rebecca Cassel
President, Client Services Group
