Our host, Roland Frasier, has founded, scaled, or sold 24 different 7 to 9 figure businesses, ranging from consumer products to industrial machine manufacturing companies, with adjusted sales ranging from $3 million to $337 million. You don’t manage that kind of success without knowing a thing or two about creativity and innovation. In this episode, Roland draws on his experience and shares his strategies so that you can grow your profits too!

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Ask Better Questions Before we break down Roland’s 5 Steps, he swears that asking better questions IS THE KEY to innovative thinking. If you want to create growth strategies that will propel your business forward, faster than the average, this is critical. If you are always asking questions like, “How can I cut costs by 1/3?” or “How can I hit my three-year goals in 6 months,” then you will turn on both the conscious and unconscious areas of your brain, and the creativity engine will engage.

“If you do what you’ve always done and copy what other people are doing, there won’t be much opportunity for innovation or exponential improvement.” Roland Frasier

Listen Today For Roland’s 5 Steps To Grow Your Profits Step #1: Implement a Top-Line Scrape. Follow the “Profit First” philosophy of demanding that your business produce a profit before anything else. You work hard in your business, and it exists to serve you by providing the standard of living that you desire. Carve out your share first and force the company to perform at a level that provides you with your required profit.

One of the easiest ways to do this that we employ in our businesses is to implement a Top-Line Scrape (“TLS”). The TLS simply takes your monthly Net Sales figure, Gross Sales less returns, discounts, chargebacks, etc. and then multiplies that figure by a fixed percent that you determine as your profit that you want to earn from the business. So, let’s say you have gross monthly sales this month of $210k with refunds and discounts of $10k, and you want the business to earn you a 15% profit. Simply establish a TLS of 15% of Net Sales, and multiply your Net Sales figure of $200k by 15% to determine that your TLS for this month should be $30k.

“This is Step #1 because if you don’t consciously decide and then insist on receiving a specific profit from your business, your business will very frequently find a way to demand every dollar that it produces to operate and grow.” Roland Frasier

The next four steps will provide you with additional strategies, tools, and techniques to drive more profit from your business so that it will be easier for you to follow the TLS model.

Step #2: Turn Expenses Into Profits When it comes to innovating to increase profitability, “E2P” is one of the most potent strategies. Here’s how it works.

First, take a look at all of your major expenses. Next, rank them from highest to lowest by category. For example, if payroll is your most significant expense, that would be ranked #1, then maybe rent, then cost of goods sold/inventory, etc.

Now that you know what your biggest expenses are, brainstorm ways that you might be able to turn those into a profit center. For one of our businesses, we identified that payroll for our content creation team in the Philippines was one of our largest expenses, costing about $50k per month. As we considered what we could do to turn that into a profit center, we decided that if we started offering content as a service to other businesses, we could actually transform this $600k per year expense into a profit center. At the very least, we could provide content creation to other businesses using our excess capacity to create a breakeven situation.

Listen for some great examples from Roland!

“You are only limited by your own imagination in creating ways to transform expenses into profits.”...