Profitability is what will determine if your business succeeds or fails.  There are a variety of ways to maximize your utilization rate and your profitability. We’ve talked about many of them already, and here is a summary.

Profitability Factors

  • Operate in the sweet spot.  These are the people that need your regular IT support and they are willing to pay for premium service.
  • Maximize your marketing efficiency by tracking every hour and every dollar that you spend.  Evaluate what’s working and what’s not working. Profitability is built on good marketing.  
  • Follow-up with people.  Many times you will get work because you’re in the right place at the right time.  
  • Form strategic business relationships.  In terms of profitability, we can’t overemphasize this enough.  Look to trusted business advisors and niche technology providers in your area.  
  • Implement a $1,000.00 a month minimum on a service agreement.  Your profitability will increase immensely because these contracts will typically amount to much more than $1000.
  • Diversify your clients.  You may enjoy profitability with only two or three clients, but what happens when one of those clients decides to bring the tasks in-house? What happens when one of those clients gets bought out?  Where does that leave you?
  • Track and forecast your utilization rates.  Look at both your actual rate and your goal rates.  Maximum profitability goes hand in hand with maximum utilization.
  • Monitor your sales funnel.  This is a utilization issue that, when well managed will contribute to your overall profitability.

Bottom Line on Profitability
Profitability is of utmost importance.  The eight factors listed above are all key to maximizing it.  You need to ensure you are following and/or implementing each in order to maintain and sustain long term profitability.

In this article, you’ve been introduced to Profitability. To learn more about how you can improve your knowledge about Profitability, just click here now to get access to a free one-hour audio training program on 5 Easy Ways to Grow Your Computer Consulting Business.