Cash Flows If Your Required Rate Of Return Is 8 The Eight Principles of Quantum Profit Management

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The Eight Principles of Quantum Profit Management

The new “martial art” of Quantum Profit Management codifies the wisdom and knowledge of the ancients within the technological framework of the present and future.

As such, adopting and following these simple principles will transform your business into a high-performing market leader.

1) Realize that you are making more money than you think. You have an internal profit generated by the most profitable items sold to the most profitable customers. Most of the internal profit is consumed by the money-losing parts of your business, so you end up with only the tip of the iceberg. Keeping a higher internal profit can and will give you 4 to 10 times your best earnings – without upselling.

2) Measurement and evaluation at the quantum level. Scientists discover how the world works by breaking it down to the quantum or smallest possible level. Do the same in your business and you will discover the perfect profitable strategies for every piece.

3) Measuring net profit. Almost everyone uses gross margin rates to evaluate sales, products, customers, etc. In practice, gross margin rates are a poor indicator of profitability and can lead to equally poor decisions. Use net profit instead.

4) Manage Deltas. The first priority of business leaders is to improve the profitability of their companies – driving cash flow, growth, opportunity and return for stakeholders. Make sure you protect and accelerate the elements that move the needle in the right direction and focus too much on changing the things that don’t.

5) Understand that financial averages mask reality. Don’t rely on numbers above the quantum level. A loss of $2,000 in one segment can hide a total profit of $199,000 and a loss of $201,000. How will you know when there is a significant profit to protect or a significant loss to reverse that would result in an immediate improvement of $200,000 and more?

6) Understanding and managing service models. Review and redesign non-performing service models – areas where you spend more money on service accounts than they generate in gross profit. Limit or eliminate activities and other costs that are not essential to the business. Re-segmentation where certain costs are necessary for one group but not for another.

7) Identification and management of cross-subsidies. Your business has areas where profitable businesses are subsidizing loss-making businesses with dysfunctional service models. Identify cross-subsidies and shift those profits to the bottom line.

8) Align goals and incentives with net profit. Make sure all incentives are directly related to the same goals you have – bottom line profit. Don’t let incentives reward your people because they create costs and disrupt your system.

By becoming a QPM Black Belt, your operation will exceed not only the market, but also your own expectations. If you are the first in your sector to recognize this, you will have an unrivaled advantage and an opportunity for clear dominance.

You can easily do this by contacting us through any of the channels listed to find out more.

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