Business Owners are are always under pressure to do more, with less, and this is one of the major pain points when delivering projects. If they are new in the business they need to on-board fast and learn everything they need quickly.
The successful delivery is the lifeblood of service-based businesses, but unfortunately, there’s no guarantee of profitability even with projects that meet the client’s expectations and are delivered on time. The trouble is that there are just so many different key factors in business profitability, many of which can be planned for, but some of which come completely out of the blue.
So, let’s take a look at the four key factors in business profitability.
- Create accurate project estimates. Undoubtedly the single biggest cause of delivering unprofitable projects is failing to estimate them properly in the first place. The first step to costing new projects is estimating the time it will take to complete the work and, more often than not, this is based on someone’s best guess. To deliver a profitable project, you need to be able to accurately forecast the amount of work required to complete the project.
- Design your process for approving and billing extra services. Scope creep is another leading factor in business profitability. Extra work that is added to the projects can really sink a budget, but going back to the client to ask for more payment after the work has been completed is difficult to justify. Instead, you need to clearly define the process by which additional work will be approved and billed from the outset. It’s essential everyone in the project team understands how requests for additional work should be tracked to ensure any work outside of the original scope does not impact on profitability.
- Understand your costs. To deliver profitable professional services you must have a firm grasp of your costs of doing business. It’s far too easy to underestimate the costs associated with delivering a project, and this is a common cause of a lack of profitability. Make sure you factor in all your overheads, from the cost of travel and accommodation, to supplies, telephone calls and everything in-between. Once you have an accurate idea of your costs of doing business, you can then start to put together a profitable quote.
- Be prepared to say No! In business, as in life, it’s essential you have the ability to say no. All too often, particularly when working with big clients, smaller consultancies can be made to jump through hoops to keep them happy. All customers and clients want something for less, but everything in this world has a price, and you cannot constantly add to your initial offering without taking a hit to your profitability. It’s essential you can say no to the customer when necessary, stand firm in your belief of the essential tasks (you are the expert after all) and stick to the prices quoted and your estimates of the work involved.
Keeping track of your profitability KPIs doesn’t have to be a headache. There are tools and solutions available that can help you manage your performance and make smarter and more informed business decisions.
Get in touch with Wibiway team and we will be glad to support you. We are specialists in profitability, business strategy, project management and digital transformation. Our dedicated application will lead your way to track your profitability KPIs and provide you the means to steer your business to success.
For details please visit: https://wibiway.com
You can test it for free at: https://register.wibiway.com