How to add 3% – 7% to your profit without raising prices; 6 signs That You Might Have a Slow Profit Leak in Your Business

Feb 26 2016

Small and medium sized businesses start off meaning well.  They are launched and grown on the backs of hard work usually starting with one or two people.  The founders are passionate about the business they start and more often than not, are usually people who don’t have backgrounds in operational efficiency and process mapping!


The successful ones grow and grow and do a lot of things right!  But somewhere along the way, profit leak creeps in – 3 to 7 % of gross margin wasted away as a direct result of inefficiencies in running the business.

Imagine if you dealt with those inefficiencies and reclaimed that 3 to 7% gross margin straight to your bottom line.  For a $10 million company that translates to reclaiming $300,000 to $700,000 PER YEAR of previously wasted profit.

How you reclaim these funds is the topic of an ebook I wrote last year.  But many people have asked me, how would they know if they had a slow profit leak in the first place?  Here are 6 signs that you might have a slow profit leak in your business.

  1. Your business was started 15 years or more ago.  In these organizations, certain processes are done simply because “that’s the way they’ve always been done”.  But does a process that made sense when your company was generating $2 million dollars in revenue still make sense now that you are generating $20 million?  Are the processes you use there because you HAVE functionality or because you LACK functionality and need the process to compensate?

  1. You have chargebacks. Many companies leak profits due to distribution and shipping errors.  Mistakes in the distribution industry are extremely expensive and can results in fines when you work with large retailers.

  1. You rely on paper processes.  Paper processes have many failure points and become a significant risk if a long-tenured employee is no longer around.  Without the experienced staff how will the process serve you?

  1. You are using “dead reports” to run your business.  A dead report is a printed report which dies the minutes it comes off the printer because your business actually keep moving forward rendering the information in the report obsolete.  You can reclaim profit by setting alerts that allow you to manage by exception.  Then you can work on growing the business.

  1. You enter in the same data more than once, and in more than once place.  Re-keying creates the opportunity for data entry errors.  Enough said.

  1. You are an expert at Excel!  Many companies have data scattered all over spreadsheets with broken links, old formulas, and partial information.

If any of these signs apply to you, you may have a slow profit leak.  If you want to find out for sure, sign up for a complimentary “Leak-Detection” walk through.  Give us 30 minutes to walk through your facility and systems and help you identify the profit leaks that impact your bottom line.  For us, it’s personal; not just business. Please call us at 1-866-320-8922.

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