However, if you change your views and opinions, Company A has done 100 times the work, and it can also be said that it took 100 times the hard work. If the final profits are the same, then Company B, which can effectively earn profits with only one percent of labor, is better. The sales income is 100 times, and the effort is also 100 times.
As long as you run a business, it is common for problems to occur, and the problems will increase proportionally with the increase in sales revenue. If the profits are the same, those with higher turnover have higher risks. The biggest purpose of operation is to increase profits. How much profit is earned indicates how much the company contributes to society. Taxes come from profit and are used by the state. If the company is profitable, its operations will be stable, and it will not go bankrupt even if it encounters problems.
The greatest mission of the operator is to commit to “sustainable operation”. That is to create a company that can be as stable as Mount Tai no matter what it encounters. To this end, we must work hard to reduce problems and reduce risks in terms of operation and management. The economic climate inevitably has a high-low cycle of prosperity and recession. There is also a high possibility of encountering unexpected situations such as disasters and infectious diseases. Because of this, it is necessary to build a business on the premise of a recession.
Even if the sales revenue is zero, the operator must build an environment that can pay the salaries and rent of all employees so that everyone can work with peace of mind. Before making a large investment that you can afford, you should establish a financial position that will protect your employees no matter what happens.
The “North Talent” I run has an annual sales revenue of about 10 billion yen and an operating profit of about 2.9 billion yen (fiscal year 2019). 1 It is not uncommon for a company to have an operating profit of 2.9 billion yen, but everyone in the industry says “29% is very high.”
In fact, among the listed Japanese e-commerce companies, although our company’s 2020 fiscal year figures have dropped slightly, its operating profit ratio still ranks first. In addition, there are also people who say whether the high rate of profit is of our company Due to “the cost rate of goods is low” and “the salary of employees is very low”. However, our company’s cost ratio is 2 to 3 times the industry standard, and the salary for freshmen ranks second in Japan (2021 actual performance ) (“Nihon Keizai Shimbun” “Freshman Salary Ranking 2021”).
Since I started my business, I have continued to attach importance to profit management in business operations.
In 2000, I started “Hokkaido.co.jp”, an online shopping company selling Hokkaido specialties, in my hometown building in Osaka where I lived. In 2002, when my career was on the right track, I went to Hokkaido and established ” Hokkaido.co.jp” (the company name was changed to “North Talent Corporation” in 2009). Now it is operating the later established “Kitano Kuaishi Kobo”. 2 The main business is online sales of health food and cosmetics own brand, with bases in Tokyo, Sapporo, Taiwan and South Korea.
In this book, for the first time, I will disclose the secrets of how the business started with 10,000 yen holding capital, how it grew to 10 billion yen in sales revenue and 2.9 billion yen in profit, and the know-how on how to raise a company with a high-yield physique.
My thinking is very simple, that is, businesses that have nothing to do with revenue should be closed or changed. To this end, we must grasp whether all business activities of the company are directly related to income. This is the unique method called ” five-stage benefit management”. For the past 20 years, I have been looking at the five-stage benefit management form every month to improve the business and build a strong body for the company.
The structure of this book is shown in Table 1. Because I am not talking on paper, but introducing specific know-how, so if you can successfully introduce the five-stage benefit management, your company will also be able to transform into a high -yield physique. No matter what industry your company is in, it can be practiced if it is based in a metropolis or a regional town. There are 44 diagrams in this book, but they do not exist to complement the text description. The diagram itself contains my own unique explanation. I hope readers will not skip it, but actually read it. I guarantee that the reading pleasure will be multiplied by doing so.
In Chapter 1, I explain why profits are more important than sales. With the outbreak of the new crown pneumonia epidemic disaster, many people should have actually experienced the crisis of unsustainable business operations. Our company also suffered great damage.
To prepare for such a state of affairs, we have been adopting a strategy of prolonging “life without income”.
The so-called no-revenue life refers to the period during which the business status can be maintained even if the sales revenue is zero. Without cost-cutting measures such as salary cuts, it was possible to maintain full staff employment, pay rent, and revive the company at this stage. In this chapter, I will introduce the “life without income” approach to surviving even zero sales.
In Chapter 2, I’ll illustrate the transition from a sales revenue operating system to a profit operating system! The law of minimizing sales revenue and maximizing profits. Sales revenue can be easily increased as long as costs are reduced. To increase the sales revenue of 10 billion yen, it only needs to advertise a lot. However, in an era of drastic changes, even if sales revenue increases during the initial investment period, there are often situations where profits cannot be recovered due to market changes during the payback period.
Therefore, it is necessary to adopt a management method that manages both sales revenue and profits. Therefore, in order to create an indestructible business foundation that will not lose to the epidemic disaster of the new crown pneumonia, I will introduce the business method of ” increasing profits by reducing sales revenue”. Furthermore, in order to cultivate the company’s profit-making physique, the company’s employees must also switch to profit-oriented. For this reason, I will live broadcast the content of the seminar “Why should I generate benefits” for my employees.
In Chapter 3, I will explain the “five-stage benefit management” that can see through a company’s weaknesses at a glance. Those who learned about the five-stage benefit management through my seminars mentioned excitedly: “I can see at a glance the products that can contribute benefits and the products that don’t.” “I have carried out the five-stage benefit management according to the business department , As a result, you can know whether the operation of each business department is smooth.” ” Because I thought about the cost thoroughly and holistically, I was suddenly enlightened and enlightened.”
The so-called cost can be divided into the cost that contributes to the benefit and the cost that does not contribute to the benefit. By screening out hidden costs and reducing unhelpful costs, profitability can be improved.
In Chapter 4, I introduce commodity strategies that have won overwhelmingly in small markets. Our business model has always focused on long-term sales of high-quality products. Our company’s regular purchases (subscription system) account for about 70% of sales revenue. This becomes a source of interest.
In Chapter 5, I’ll cover the sales strategy that achieves a 29% profit margin. Increase marketing expenses, and sales will increase. However, if you add too much, the benefits will be reduced. Therefore, I want to teach the ” method of managing CPO” (Cost Per Order: the cost required for a single order). Going further, I will explain how to halve the sales revenue, increase the profit by 1.5 times, and triple the profit rate.
In Chapter 6, I will introduce the ” EnkaStrategy” (customer strategy) to hold on to fans and prevent them from never changing their minds. There is a difference between “sell something” and “keep selling something”. , I disclosed the “enka strategy” of only contacting people who are interested in the product, so that customers who have bought the product once will not change their minds for the rest of their lives.
In Chapter 7, I’ll cover talent strategies that can consistently improve profitability even with no experience. I will introduce how to create a business system that allows inexperienced or new employees to become immediate combat power, and how to let the organization as a whole germinate the “only way” of cost awareness and concepts.
So far, many people have asked me the following questions: “Why, you are such a small company, the total market value can be as high as 100 billion yen?” “Why, young employees can work so vigorously?” indeed answer these questions.
In Chapter 8 (final chapter), I will explain the strategy to achieve sales revenue of 100 billion yen and profits of 30 billion yen.
I am both the owner of the company and the head of marketing.
The company’s marketing activities and operations are directly linked, and the marketing figures are completely connected with the operating figures. Through the thorough analysis of huge amounts of data, the algorithms of various advertising media, and the status of users, product effective development and can complement each other, and can maintain such high-yield results along the way.