Profitability Traps

Today was the quarterly education day for Accelerator, with the topic being money. Our facilitator was Jim Ryerson of SalesOctane who brings a great deal of energy and passion to the program. We worked through a series of exercises, one of which was talking about profitability traps. Profitability traps are where you do things that aren’t profitable. Why would do something that isn’t profitable? Good question — let’s look at a few, straight from the Accelerator materials:

1. “Falling in love with” your customers
2. Valuing quantity over quality
3. Creating work to keep the staff busy
4. Failing to correctly account for costs
5. Making up for per-unit costs in volume
6. Taking projects at a loss to keep competitors from getting them

My recommendation is to pay attention to these types of traps and continually ask yourself if a customer or project is going to be profitable before jumping into the work.