Strategy Meets Finance The 3 Ways You Can Boost Your Gross Profit in Your Business | Ep 05
Aug 7, 2022
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Focus on Gross Profit
- Steve Coughran suggests focusing on gross profit improvement if experiencing declining profitability.
- He advises targeting gross profit before overhead, not net income or EBITDA.
Volume Impact on Gross Profit
- Increasing sales volume boosts gross profit in dollar terms, not percentage.
- Sustainable growth is key, avoiding unsustainable tactics like excessive discounting.
Groupon and LivingSocial Example
- Groupon and LivingSocial's discounting model attracted non-loyal, price-sensitive customers.
- This unsustainable approach led to customer churn and difficulty in raising prices.