“Profit Center”, it’s the new buzzword being tossed around like a football across corporate America. It sure sounds good, doesn’t it? Of course it does, who doesn’t like profits? Unfortunately saying the words “Profit Center” and actually having one are two different ball games.
To put it simply, a Profit Center is defined as, “The branch or division of a company that creates profits individually and separately from the main organization.”
There are essentially two methods of creating a profit center for your organization. First, you can offer a new service that creates a profitable revenue stream. Second, a cost center can turn into a profit center by selling those administrative “cost of doing business” services to other firms. As Management Professor William E. Halal so eloquently stated to USA Today Magazine, “When a business firm becomes a corporate community of entrepreneurs who buy, sell and launch new products and services internally as well as externally, it gains the same creative interplay that makes market economies so advantageous.”
For the purpose of this article we will focus on creating a new profit center rather than converting a cost center into a profit center. The easiest way to create a new profit center is to add service offerings that align with an existing client base.
For example, CPAs, A/E/C firms, and even most Contractors have an existing base of business clients and referral partners who own commercial property. Are they maximizing on the plethora of accumulated property data, let alone the hard-earned relationships they’ve developed? These are not cold leads or warm contacts but EXISTING CLIENTS who have already paid money for their services. Failing to monetize an existing client base with value-added services is just bad business.
So, how do I create a new service offering and market it to my existing client base? The easiest way to accomplish this is to partner with an organization that already has a profitable service on the market that would be a benefit to your clients. Once a partnership is established, the next step is to effectively spread the word to your existing client base. Communicate how your new opportunities will benefit them and move them through the sales cycle. If you have done it right, your existing clients will thank you for your high level of client service. This truly becomes a “win-win-win” proposition!
ForCostControl provides custom services to business owners across the nation to increase sales, reduce cost, and procure specialized tax incentives. We also offer strategic partnership to firms looking to utilize their existing client relationships to generate new revenue streams.
For more information please <a title=”Contact Us” href=”http://www.costcontrolteam.com/contact-us/”>contact us</a>.