Carol Bartlett is a senior level executive with broad experience in the oil & gas and transportation industries who manages more than $200M in annual sales. Using a combination of proven techniques, Ms. Bartlett focuses on growth results. She bridges theoretical business principles and philosophies to strategic actions that give profitable results. By deploying integrated proven strategies, she adds value to companies that want to grow sales and increase profits.

Jol Hunter has spent a large portion of his career as a partner with the national firm of chartered accountants and business advisors. In the past few years, with three other gentlemen, he has owned a substantial Atlantic Canadian business and so he is experiencing the joys and challenges of the ownership and operation of a medium-sized business.

Chris Spurvey spearheaded the growth of Plato Consulting to the point that it was acquired by KPMG, one of the largest management consulting firms in the world. In his time there, he sold more than $300 million in consulting services. After the acquisition, Chris changed his focus to helping other "non-sales sellers" find a way to grow revenue in a consistent, stress-free manner. He published It's Time to Sell: Cultivating the Sales Mindset, founded Make Sales a Habit University, and became a growth advisor to business owners and their management teams throughout the world.

 

This week, Chris, Jol and Carol talk about the profit formula, what it means to the client, and the effects of cost cutting on the business.

 

A Mathematical Perspective on Business

One way of looking at your business is as the mathematical formula for creating profit. If you think about the profit formula from a mathematical point of view and then think about the elements of the formula, you can figure out what you can do to make the result what you want.

 

Purpose of Increasing the Profit Margins

Every strategy in every business, if you peel it all the way back, is designed to do one of two things: increase payments to the company or decrease payments out of the company. One way or another—and it may be a long route— that's what businesses are designed to do.

 

Low-Margin Businesses vs. High-Margin Businesses

In low-margin businesses, processes are usually very well developed and look at the cents and the seconds. These businesses set their units of measurement so that everybody in the company is very aware that it takes a lot of volume to make any amount of profit.

 

The oil & gas industry usually is a very high-margin business. But during the economic downturn we had to look at every single expense line item. The problem is that we had to define the cause of each expense, so it was no longer good enough to look at, for example, the office supplies category. Instead, we had to look at the detail of pens, paper, etc. and figure out what we could eliminate. In other words, looking at the expense category was no longer sufficient. We had to break it down further than that. And that required discipline.

 

To learn more about these topics, listen to the episode.

 

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The Profit Formula (Jol Hunter)