Double Your Profits: In Six Months or Less Book Summary

This is a book summary from Double Your Profits in 6 Months or Less.

Grab a few ideas and try to implement them. Then come back and implement a few more.

If you are interested in buying, growing, and selling small companies, check out my course & community on it at IndiePE.com.

78 ways to double your profits in six months or less:

1. Every cost is up for grabs.
2. Assume that every cost can be eliminated, unless proven otherwise.
3. They are at best a necessary evil.
4. Unless cost elimination reduces revenues or raises some other cost, it should be eliminated.
5. Cut costs first. Ask questions later.
6. Cut costs too much and you’ll get lots of chances to correct your mistake.
7. Spend too much and that money is gone forever.
8. Spend on strategic over non-strategic costs.
9. Strategic costs increase the bottom line by bringing in business.
10. Example: ads, commercializable R&D, salespeople.
11. For such costs, outspend competitors and spend in good times and bad.
12. Non-strategic costs - ex: administration costs.
13. Ruthlessly cut to the bone.
14. Assume it can be eliminated unless proven otherwise.
15. Place the burden of proof on justifying costs, not on eliminating them.
16. Maximizing customer satisfaction leads to bankruptcy.
17. The goal is not to maximize the differentiation of products/ services.
18. It is to provide those elements of differentiation that the customer is willing to pay for and not those that the customer is not willing to pay for.
19. Focus on strategic time, not non-strategic time.
20. Strategic time produces profits.
21. Non-strategic time is busy work that does not contribute to profits.
22. Set tight deadlines – it helps to eliminate non-critical tasks.
23. Create and maintain a sense of urgency in the organization.
24. Set the culture:
25. The goal of the organization should be to be the best.
26. Never apologize for focusing on profits.
27. Communicate to employees that it will benefit them too.
28. Align incentives so it's true.
29. Translating the culture into action.
30. Words -> Action -> Results -> Rewards -> Strong corporate culture -> Action -> Results...
31. Set arbitrary non-negotiable budgets.
32. This will force managers to come up with ways to contain expenses.
33. If you cut too much, you’ll know about it.
34. Make employees ask the boss to spend money.
35. Be somewhat of an intimidating person to approach.
36. Scrutinize requests critically and disallow as many as possible.
37. Everyone loves to spend money in anonymity.
38. Make the spending of money a difficult process.
39. No cost is too small to worry about.
40. Every cost must prove its worthiness.
41. Don’t worry whether employees will respect you.
42. Toughness + competence engenders respect, not resentment.
43. Never let your purchasing person negotiate the price.
44. Over time, they develop a personal connection with the supplier.
45. You need a “bad guy” to blame hard negotiations on.
46. Then let the purchasing person relay the "bad guy's" decisions reluctantly to the supplier.
47. Declare freezes and cuts. Say “times are tough”.
48. Communicate this via a note from the CEO.
49. Go to bid, frequently.
50. Every price increase you accept for any item without a competitive bid is wasted money.
51. Either conduct a competitive bid or just tell suppliers that you are doing it.
52. Cut your use of purchased goods and services.
53. Scrutinize tech expenses like other expenses.
54. Developers know tech – but not management or how to make a profit.
55. Make the developers explain the value of every R&D expense in layman’s terms.
56. First-class travel should be outlawed.
57. Question whether any travel is really necessary.
58. Stop spending on furniture.
59. Used is fine.
60. Cut 40% from office supplies.
61. Insure only big, potentially devastating risks.
62. Cut excess subscriptions.
63. Office space should be functional, not luxurious.
64. Think before investing in office real estate.
65. If you are not in the real estate business, don’t pretend that you are.
66. Give up your own office.
67. It will give you credibility that you are serious about cost reduction.
68. Sign (not literally) all the checks yourself.
69. Category aggregations in cost reports lead to loss of detail, which this exercise can provide.
70. Extend the payable period for accounts payable.
71. It is amazing how much cash this frees up.
72. Deplete inventory – till it reaches the minimum required quantity.
73. Order only in the required quantity, so that working capital costs are lowered.
74. If you never fire an employee, you can’t have an excellent business.\
75. Good performers will feel demotivated if poor performers are rewarded similarly.
76. Poor performers will remain unless there is a meritocracy.
77. Keep human resources scarce.
78. This will drive out inefficiency and unnecessary work out of the system.
79. Setting salaries:
80. For employees who have a direct impact on the company’s bottom line, average pay should be far more generous than for similar positions in other companies.
81. For others, be more generous than most other companies, but you don’t need to be excessive.
82. Within any level or group of employees, there must be wide disparities in salary tied to demonstrable differences in performance and contribution to the bottom line.
83. Many employees discount the value of benefits and prefer hard cash.
84. Give benefits that employees truly value.
85. Adjust them to find what works best.
86. Never give regular bonuses - it will cease to be a motivator.
87. Titles are cheap. Give them freely.
88. "If you don’t want to give someone a raise, give them a fancier title."
89. Motivating employees:
90. The message should be:
91. “Stick with me and you’ll learn a lot and be paid generously. What I ask in return is that you strive to be the best and to help the business achieve its objective.”
92. Emergency or remedial headcount reduction for unprofitable businesses.
93. 1/4th of white-collar jobs are not required.
94. Eliminate most of your “administrators and managers”.
95. Every manager should be one of their own direct reports.
96. Your want “doers”, and not just another “manager”.
97. It will also help them stay in touch with the market.
98. Be most ruthless with your internal staff functions.
99. Most companies are over-staffed.
100. Close the outside contractor loophole.
101. Many companies hire consultants at a higher cost, after a headcount reduction exercise.
102. 50% of those are unnecessary.
103. Eliminate unnecessary number-crunching reports.
104. For qualitative reports, be direct and blunt, content-full and process-free.
105. CC e-mails only if really needed.
106. Streamline your meetings.
107. As few people as possible.
108. Keep it short.
109. Never call a meeting to discuss, only call to decide.
110. Stop off-site meetings.
111. There are no such things are companies, only people.
112. 4 ingredients for completing a sale:
113. Show your competence.
114. Empathize personally with the customer
115. Convince them that you’ll stand in front of a truck for them
116. Make it clear that you don’t need them. Scarcity creates its own demand.
117. Customers don’t buy products; they buy the satisfaction of their needs.
118. Satisfy their needs.
119. No two customers are alike.
120. Tailor your offering and your sales pitch.
121. Customers can smell blood in the water like sharks.
122. Be confident while selling.
123. Convey the message that you are certain, beyond a shadow of a doubt that if they buy from your organization, they will wind up not only satisfied but thrilled.
124. The selling process is your best chance to show the customer what you can do.
125. Respond very quickly.
126. Respond very professionally.
127. Communicate with customers at a high quality.
128. Communicate your flexibility and willingness to do whatever it takes.
129. The next sale starts the moment you make the first sale.
130. Confidently make the first sale and deliver it.
131. Customers will count on you, and use this confidence to make more sales.
132. Selling is the attraction business.
133. Each of us buys things from people we like, and are attracted to in some way.
134. Pricing - People who ask for more, get more.
135. Make sure you are charging every customer the most that they are willing to pay.
136. You’re leaving money on the table.
137. Determine price, then product or service, not the other way around.
138. For B2B services, ask the customers what price they want to pay.
139. State ranges and lets the customer respond.
140. Ask them to state the budget and say that you’ll scope to that price and adjust if necessary.
141. Be silent once you ask the customer about the price.
142. To capture the consumer surplus for mass-market, price discrimination.
143. Ask yourself: “How do I create relatively small but highly visible differences in the various offerings within my product line so that I can capture the most each group of customers is willing to pay?”
144. The key – get the highest possible price, but, don’t lose any customers.
145. Try to raise the price as high as you can, but don’t force them to say “yes” or “no”.
146. Questions should be phrased so that the answer is either “yes” or “yes, but at a lower price, please”.
147. Be dignified about pricing.
148. Let the customer know that you don’t want to negotiate price and say that both of your care more about the professional delivery of quality goods or services.
149. Price as late as possible in the selling process.
150. Don’t mention the price until the customer does.
151. Price has nothing to do with cost.
152. You price what the market will bear.
153. Marketing is a strategic cost.
154. Outspend your competition in good times and bad.
155. Don’t be afraid to use a shotgun.
156. Try to sell to as many people as profitably possible, to increase the chances of a sale.
157. Worry only about customers who buy, not those who don’t.
158. Invest in your sales force – no investment will yield a greater return.
159. Make sure you have enough salespeople.
160. Make sure salespeople spend time with customers, not doing administrative work or other things.
161. Hire enough VAs to support the sales force to free up their time to spend with customers.
162. Compensate salespeople highly variably as a function of profits, not sales.
163. Hire salespeople who understand how to sell and how to make a profit, not people who just know the product.
164. Invest in sales training, focused on true selling and profit-making skills, not just product facts.
165. The last cost-cutting step: Do it all over again.
166. Initially, it is tough to do the cost-cutting measures.
167. After a few months, it gets easier.
168. Now it is time to do it all over again.
169. Enjoy your newfound profits!

This is all from the book Double Your Profits in 6 Months or Less.

If you are interested in buying, growing, and selling small companies, check out my course & community on it at IndiePE.com.

If you know of anything I should add to this please reach out @ColinKeeley or Colin@ColinKeeley.com.  I’ll continue updating as I learn more.

‍