The Eight Principles of Quantum Profit Management

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

As such, accepting and conforming to these simple principles will transform your business into a high-performance market leader.

1) Understand that You’re Making More Money than You Know. You have internal profits generated by the most profitable items sold to the most profitable customers. Most internal profits are consumed by the parts of your business that lose money, leaving only the tip of the iceberg on the bottom line. Retaining more internal profits can and will deliver 4X to 10X your best earnings – with no additional sales.

2) Measure and Evaluate 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’ll discover perfect profitable strategies for every piece.

3) Measure on Net Profit. Nearly 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 decision making. Use Net Profit instead.

4) Manage the Deltas. Corporate leaders’ first priority is to improve the profitability of their businesses – fueling cash flow, growth, opportunity and return for stakeholders. Make sure you’re protecting and accelerating the elements that are moving the needle in the right direction, and become hyper-focused on changing the things that aren’t.

5) Understand that Financial Averages Mask Reality. Don’t rely on numbers above the quantum level. A $2,000 loss in one segment can be hiding a combined $199,000 profit and $201,000 loss. How will you know when there is a significant profit to protect or a significant loss to eliminate that would result in an instant $200,000+ improvement?

6) Understand and Manage Service Models. Review and redesign dysfunctional service models – areas where you’re spending more money to service accounts than they generate in Gross Profit. Curtail or eliminate activities and other cost inputs that aren’t essential to the business. Re-segment where certain costs are necessary to one group, but not to another.

7) Identify and Manage Cross-Subsidies. Your operation has areas where profitable business is subsidizing money-losing business with dysfunctional service models. Identify the cross-subsidies and divert those profits to the bottom line.

8) Align Goals and Incentives with Net Profit. Make sure all incentives are directly connected to the same goals you have – bottom-line profit. Don’t let incentives reward your people for driving cost and dysfunction into your system.

Becoming a QPM “black belt” will have your operation outperforming not just the market, but also your own expectations. Being the first in your sector to recognize this will give you an unmatched advantage and the opportunity to clearly dominate.

You can easily do this by contacting us via any of the channels provided to learn more.