Imagine this, two companies each say have the same annual revenue. Company 1 sells a product that they make. Company 2 sells a service that they charge for by the hour.
At day 1 they both have the same level of revenue and profit.
Both companies get better at what they do, their staff become faster and their operation becomes slicker. Each company increases the efficiency of fulfilling the company by 20%.
Company 1 (the product company) is able to take on more order with the same staffing levels or can choose to reduce its staffing levels and add more profit to their bottom line as revenue remains the same.
Company 2 (the service company) does the same work for the same customers in less time, the customers are delighted as they are charged less and the company makes less revenue and less profit.
So here lies the problem…. In a “Selling Time for Money Business” the better you are at you job the more the customer benefits and you don’t. This is not a good way to make more profit and does not scale well. However there are a number of solutions to this. Watch the video below and find out.
If you find it useful, or if you have some ideas or suggestions for others in this situation please leave a comment.
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