Jonathan Byrnes sees green where others see only red. He discusses how to find Islands of Profit in a Sea of Red Ink in all companies.

Jonathan L.S. Byrnes, is a Senior Lecturer at MIT. He is an acknowledged authority on profitability management. He is President of Jonathan Byrnes & Co., a consulting company founded in 1976.

His latet book is titled, Islands of Profit in a Sea of Red Ink:
Why 40 Percent of Your Business Is Unprofitable and How to Fix It.

Jonathan calls today “the Age of Precision Markets.” He also state, “most of the management processes taught in business schools were developed for the prior Age of Mass Markets.”

Jonathan’s main theses are: a. Nearly 40 percent of every company is unprofitable…by any measure.  b. 20 to 30 percent of every company is so profitable that it provides all the reported earnings—and subsidizes the losses—of the entire business.

Jonathan created “profit mapping” for determining where companies are making the big profits and losses. In most every company, the profit mapping needs to be only 70% accurate to be accurate enough to show the trends.

The most important thing for any company is to identify the 20%-30% of the clients who provide the most profits and secure those clients. In fact, Jonathan remarks that most companies are over charging and underserving their top 20%-30% of their customers.

Listen to the entire interview below: