Are you thinking about selling your business? Most family business owners are leaving 20% of their profit on the table and they don't even know it. You don't need more customers to fix this. In the next 90 days, you can increase your profit by at least 20% with these three moves.

Number one, raise your prices. Raise prices on the top sellers. Just in five to 10% of your best products alone, you can create a huge bump in profit with minimal pushback from those who are your most reliable, most loyal customers.

Number two, cut low margin offerings. If it's not hitting your target gross margin, you gotta drop it, whether it's a product or a service. Reprice it, drop it, do whatever you gotta do to cut your low margin offerings.

And number three, renegotiate supplier terms. Better pricing, better payment terms can add tens of thousands of dollars to your bottom line instantly. If you're thinking about selling your business, these changes can add millions to your sales price and you should do it before a buyer sees your numbers.

This is the Inside B.S. Show. My name is Dave Lorenzo and the fastest way to add 20% to your profit in 90 days is with the three strategies that I've just outlined. Let's break each of these down into exactly how you can execute them.

Buyers love businesses that are optimized for profit. They'll pay more for your business if it is highly profitable. Now, if you skip the three steps that I outlined and then I'm gonna go into detail about here, if you skip these, a buyer's gonna buy your business and they're going to reduce the amount that they should pay for it because buyers pay for future profit.

Once they take over the business, they're going to use the strategies that I share with you to unlock the profit immediately. So let's talk about how you can raise your prices on your top sellers. That's the first strategy I outlined for you.

What I want you to do is find the top 20% of all your products or all your services that you're currently selling. These are your top sellers. Whatever you're doing the most volume of, the top 20%, I want you to test a 10% increase in each of those products or each of those services.

You can test a 10% increase to new customers if you wanna be super conservative, but what I usually do is I usually do a 10% increase across the board and I'll start with my current customers and I'll say something like this. With inflation and everything, the cost of providing our service has increased. I've had to give my employees an increase, true.

I've had to pay the cost of electricity that has increased the cost of maintaining our space and everything involved with our service has increased dramatically. So, Mr. Customer, I'm going to have to increase the price of our service to you. We're going to phase this in gradually.

Over the next three months, we're going to increase the price of our service about 3 1⁄2% each month. I know it's tough to have to absorb a price increase, but as I'm sure you're doing with your customers, we have to increase our prices in order to keep up with the pace of the inflation in the economy. Now, that script is only necessary if your increase is something that they're gonna feel right off the top.

So if they're buying in a huge volume for you, they're gonna feel it, so you're gonna have to call somebody and have that conversation. If your price increase is dramatic and it's completely and totally noticeable, then yeah, you gotta have that conversation, but in most cases, you can just pass that through and when people ask, use the script. So raising your prices on your top-selling products or your top-selling services, this is not something that most people are gonna notice.

New customers are certainly not gonna notice it, and if you continue to sell based on value, you're never gonna have a problem with this. All right, number two, cut low-margin offerings. So I want you to analyze the gross margin of every line item in your business.

Everything you sell, look at the gross margin. I want you to remove or reprice anything that is below your targeted margin. So if you have a targeted margin of 50% on your products, everything that's below 50% for a gross margin, it's either gotta get repriced or it's gotta come off.

And to be candid with you, if the repricing is so dramatic, you may wanna just consider rebranding that product or rebranding that service when you reprice it. This focuses your resources on profitable growth. Get rid of the losers, get rid of the bottom 10%, focus on repricing those that are close to your average or your targeted gross average margin, and then maximize the opportunity for those that are at the top of your margin.

But you gotta cut low-margin offerings immediately. All right, number three is renegotiating your supplier terms. What does this mean? I want you to review your top five suppliers, the people you're spending the most with, and then I want you to go back to them and I want you to negotiate a better deal, a discount.

And you may have to pay in advance, you may have to have some sort of different type of terms. If you can't negotiate a discount, negotiate extended payment terms that'll improve your margin over time. Offering commitments in exchange for better pricing is often a good way to go.

So you can say, I'm gonna commit to buying X amount of product over the course of the next year, or I'm gonna commit to you being my only supplier in this area in exchange for better payment terms. This renegotiation of supplier terms drives money directly to the bottom line, and it's a fantastic way for you to improve your margins overall. Now, I wanna make sure I'm really clear and I discuss with you the consequences of not doing this and the implications it will have for the price of your business if you're trying to sell your business.

Every dollar of profit growth pre-sale of your business can add three to $5 to the overall sales price of your business, why? Because it increases the profit, and that's what people are paying for when they're buying your business. They're buying future profits. If you ignore this, the buyers, when they buy your business, will buy it at a discount, and they're gonna implement these changes immediately.

These are the three things I do with all of my clients when we're looking to help them sell a business, but when my clients are buying businesses, these are the first three things we do because it gooses the profit immediately and provides a phenomenal return on investment. So you, as someone who's selling a business, need to take advantage of this. You need to do these three things right now.

Don't sell your family business until we talk. I'll help you double your profit before you sell your family business, and I'll help you do it by implementing things just like this. Now, I am creating a series of shows that will help you sell your business for maximum profit.

In our next episode, I'm going to show you how to plug profit leaks before your buyer finds them, and if you don't fix these profit leaks early, you're not gonna be able to protect the hundreds of thousands of dollars that you could be taking to the bottom line before you sell your business and the huge amount of money you could realize when you're ready to sell your business. My name is Dave Lorenzo. I'm the godfather of growth, and I'm here to help you double your profit before you sell your business.

Join me tomorrow for our next show.