I read an article earlier this week talking about Sony’s profits.

Where do you think it came from?

MP3 Players?

Camcorders?

Digital cameras?

Laptops?

Flatscreen televisions?

Before I read the article, I would have guessed any of these.

In fact, 70% of Sony’s total profits last year came from a totally different source: Simon Cowell and his Sony subsidiary company Syco.

I think this is a great lesson for small business.

It pays to know exactly where your profits are really coming from. Identify what brings in the lion’s share of your profits by asking yourself the following questions:

• Which clients create the most profit for you?
• Which products generate the most profit?
• Which activities create the most profit?

They are simple questions. They may or may not be simple to answer.

But it’s definitely worth your effort finding out.

The fact is a 25% increase in a tiny part of your business is really only a tiny overall increase.

But the same increase in an area which creates the majority of your profit can have an overwhelming effect on your business.

As much as anything else, it’s about spending your effort wisely in the areas it can make the most impact.

“Profit analysis” may sound dead boring but it’s really the key to expanding your business.