As business owners, we all want to increase our bottom line. The best way to do that is to continually grow your business. Growing your business means more cash for you now plus a higher sale price in the future when/if you decide to sell.
Over the last few months we have shared three articles designed to help you grow your business including:
This week, we focus on our 4th piece of the puzzle – improving your profit.
Top 8 ways to increase your profit
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Identify your ideal client
When you are starting out, any client is your ideal client. Yet once you are established and underway with a regular client base, you’ll start to identify who your ideal client is. Once you have your ideal client in mind, focus your marketing efforts on attracting them. It could be the easiest clients you deal with. It could be the ones who are most profitable. It could well be a mix of both. But once you have your ideal client in mind, your marketing strategy will become clearer, more tangible and measurable.
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Identify your competitive advantage and market to it
Every business should have a Unique Selling Proposition – a USP. Fancy language for – the reason why your product or service is better than everyone – or everything – else. What makes you different? Why should your customers buy from you and not the business across the street? Know what makes your business special and use it in your marketing efforts.
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Automate processes
Look at your current processes. Are there any changes you could make to save time and money, to be more efficient? If you are online, changing from clunky old server systems to new technology, or switching from manual to automated systems. Implementing automated processes leaves you with more time to focus on business development than time-consuming administrative tasks.
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Lower your costs and wastage
Can you reduce your energy usage across your business? Are there cheaper providers that can provide a more competitive rate? Can you renegotiate with your existing suppliers for a better rate for continued loyalty? It is worth shopping around. Can you also pull back on your operating waste? This can be done by producing goods more efficiently to reduce wastage.
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Speed up your outputs (without compromising on quality)
Are there ways you can improve on your existing outputs? Can you employ more staff to deliver your products or services more efficiently? Can you upgrade your equipment or update your software? Keeping up with your relevant industry standards will ensure you are operating your business as efficiently as possible. This is the ideal time to review your processes and procedures to look at ways of streamlining the ‘factory’.
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Negotiate ways to improve your margin
Price increases are an expected part of any business. Where can you confidently increase your process without deterring your consumers? Is there high demand there for your product or services? Keeping any price increases in line with the market is advisable to ensure keeping your loyal customers on board.
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Keep on top of your books
Good business owners know their books. This doesn’t necessarily mean managing the day-to-day bookkeeping – but understanding it and regularly checking in. Are your suppliers being paid on time? Are your debtors paying on time? Do you need to review your payment terms? Do you offer a range of convenient payment options to make paying your business an easy process for your customers? Keeping on top of your books will help you to keep on top of your business – and your bottom line.
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Know your KPIs and Keep Them Front of Mind
Do you know the key drivers of your business? The core products and services that form the backbone of your business? What are they? Focus on identifying them and keeping your focus on growing this part of your business. Regularly monitor your KPIs and always work towards improvement in these areas.
What to do next?
Why not book in for a 30 minute meeting with one of our expert accountants and business advisors to brainstorm the above ideas and create a tailored Action Plan to help you increase profits and the value of your business? Simply contact our friendly team to book a time.
