In a small business, there’s no denying that there are products that reach the end of their life cycle. There comes a point where sales and profits are no longer growing, but instead, they are declining. The good news is that orders are still arriving, so you have time to make a plan of action.
One key way to maintaining profitability under all circumstances is to step back and assess what is necessary to put into place in order to profitably process these orders, now that the quantity is dwindling. For instance, a vital question to ask is: What is the minimum quantity necessary to profitably fulfill an order? Is there a minimum quantity just to justify manufacturing the product?
Fully understanding your customer's changing needs is an opportunity to align the features and terms on your side to meet them – and not one bit more. Trim away any and all frills that are not specifically in place at the customer’s request. You can maintain a profitable arrangement for years, even as orders decline, as long as you closely watch the trends – and protect your bottom line.
Even before orders begin to taper off, explore what other products and services you can offer to retain these customers, meet their needs, and drive profits to the bottom line.
You can boost your profitability.
Donna Marie Thompson, PhD
Creating your best profit solutions is my highest priority.
http://www.expertprofitsolutions.com
PS: For more information please click on the link to get my Special Report: "3 Profit Pitfalls and How To Avoid Them."
Remember – JSNTTSQ
Donna Marie Thompson, PhD is a Small Business Profitability Expert and Founder of Expert Profit Solutions. She is a two-time best-selling author who has spent most of her career problem solving in international management consulting.
Donna Marie has helped businesses meet their profit targets under challenging circumstances. She was a Director at PricewaterhouseCooper's Consulting, and has worked at Booz Allen, as well as local consulting firms. This wide range of experience in businesses of all sizes uniquely qualifies Donna Marie to guide small businesses to discover their hidden profit potential.
Donna Marie earned a PhD from George Washington University, an MBA from Virginia Polytechnic Institute, a CPA in the state of Maryland, and is a Master Practitioner of the Energy Leadership Index.