Commissioned sales professionals fascinate me. Think what you want to about salespeople, the fact is many of them only earn income when they close a sale and actually make their businesses money.
What do you think would happen if our hourly or salaried jobs were turned into commission-only jobs? I believe people would work a lot harder and take more initiative in the jobs they do each day.
Even though it may be difficult to determine how your skills or services make or save an organization money, you must understand how your contributions influence a company’s profitability. You need to communicate your value in terms of dollars to potential employers or customers.
You may have heard that when it comes to job hunting, promotions, or getting new clients, it’s “who you know, not what you know” that counts. I disagree with that statement. I believe it is who you know AND what you know that invite the best opportunities.
Hard economic times have done a lot to reduce favoritism and cronyism to some degree. (Cronyism: appointing people to positions or jobs without regard to their qualifications.) Businesses cannot afford to hire or give contracts to people who are not really qualified to do the work.
Businesses are interested in what you know, what you can do, and how it will help them. They’re not so impressed by whom you may know in the executive offices. Businesses, non-profit agencies, and even government organizations are interested in how you might make or save dollars for them.
This article discusses some basic concepts of how money works. As you understand these principles, you’ll be able to get better work and income by contributing more to a company’s bottom line. (Bottom line: the final calculation that determines whether or not a company has made a profit or lost money.)
Where Does Money Come From?
Money–in the USA–originates from the Federal Reserve who loans it out to banks. Banks, in turn, loan it out to businesses and consumers while charging interest. The money circulates as a basis of exchange for products and services. But how is it that you convince a consumer or business to give you their money?
Businesses should not focus on making money. You should not focus on making money. You may object, “Well, that’s why I work–that’s why businesses exist–to make money, right?” Yes, you and your business need to bring money in to operate and purchase your own necessities.
What I’m proposing is that you should not focus on the income, that it shouldn’t be your goal. Your primary concern as an employee or business owner should be to provide meaningful products and services. Money comes as a byproduct of delivering valuable products and services to other people.
Of course you need to put a price on the products and services you offer. Giving everything away might make you feel good about yourself, but it isn’t sustainable. Organizations are concerned with being profitable, or at least staying within budget.
Making (More) Money
The lesson on problem solving which is further down in the lesson outline will reinforce this principle on making money. You get paid for providing solutions to problems; a consumer or company’s problem of having an unfulfilled want or need. Here are some ideas of how you can make a business more money:
- Create a new product or service
- Identify a new or under-served market of potential customers
- Increase your market share for an existing product or service by offering better customer service than your competition
- Increase the profit margin for a product or service by figuring out how you can charge more for what your business offers
Challenge: Show Them the Money
- Use your imagination and generate some ideas of how you could make your business more money.
How to Help Companies Save Money
Generally, aside from the actual costs of products companies may sell, the largest expenses many companies face are for payroll and healthcare benefits. These costs keep rising. That’s why when companies face hard financial times, they fire employees before they sell assets, equipment or property.
Other expenses companies face include utilities, professional or technical services, taxes, machinery and equipment, inventory, legal fees, office/property/warehouse mortgages or leases, etc. You can save companies money (and increase your own career and income prospects) by reducing or eliminating their dependence on these expenses.
Here are a few ideas you can implement to help save your company money:
- Develop a new process for helping employees get more work done in less time
- Create a program that automates some of the work employees normally do
- Find ways to help employees be healthier (many large companies are implementing “wellness” programs to help reduce healthcare expenses)
- Develop ways to manage office/warehouse space better, to reduce how much is needed
- Identify ways to (legally) shelter the company’s taxable income and assets
- Negotiate lower prices with suppliers or find a new supplier who charges less
Challenge 2: Pinch Pennies
List some other ideas of how you could save your company money.
- Money comes as a byproduct of delivering valuable products or services to other people and businesses.
- You can increase your chances of getting better work and income by knowing how to help companies make or save more money.