5 Ways To Increase Profits in your SME
It's not a dirty word! After all we are all in business to make a profit and at the end of the day create something that we can be proud of - as well as sustain ourselves and our families. Creating more revenue than expense with sufficient margin is the goal of any successful business. After all, having more come in than go out means at the end of the day there is something left over to show for all of your hard work. For some businesses with an altruistic focus, it is sufficient at the end of the day to be able to return a Zero balance and achieve their goal of providing humanitarian or other goals, to fit their business plan.
If you're a Small Business Owner though the 'P' word is pretty high up on your wish list and does help keep the door open. Altruism certainly has its place in an aggressively commercial world, but making sure that the cheque account is in the black is, or should be a prime focus for any successful Small Business Owner. After all it's unlikely you will have the line of credit that a public company can dip into when required, and many Bank Managers whilst sympathetic, do have prescribed conditions they need to meet in order to be of assistance to you when you need it. Here are some strategies you might want to consider to increase your bottom line.
Systems, Systems, Systems Can you do it better? And better doesn't always mean cheaper. Often more isn't better...better is better. If you've never heard of the Japanese process of 'Kaisen' then it's worth doing a bit of research on what this is and if there is an opportunity to consider this for your SME. In this process anybody within the company is allowed and encouraged to come up with better ways of doing things. It may be that someone in your organisation has an idea that will make a better 'widget' so why not hear what they have to say. You may be surprised when someone who you may not consider as suitably qualified coming up with something that could change your entire process.
Being open to the fact that your current process of system may be improved upon could be a game changer. So constantly review your systems. Are they the job, could they be better. Ask yourself:
Can we do it better?
Can we save time and money doing it different way?
What impact would doing it differently have on my business?
What is the cost impact +/- on my business in doing this?
Everybody is a Salesperson - Depending on your size you may have designated Salespeople. Others in your business may see that the responsibility for generating sales lies with this person/s. Uh uh...everybody is a salesperson, everybody in your SME is an advocate, even if they aren't doing the direct pitch or quotation they are still part of your revenue generating team. They can have their own simple elevator pitch, and they can pass that lead on to your designated resource. If possible incentivise them to do so.
Become a Marketing Guru - It's totally reasonable to want to pass this part of your business to someone else, and it may be that outsourcing it to some social media specialist company is the way to go for you. But you can spend an awful lot of money in online campaigns for little reward, and whilst it may make you feel good that you have online campaigns running driving leads to your site/business, the question always to ask is 'At what cost?' Do you spend a significant portion of your income on generating leads that just pay for your marketing spend - to make you feel like you're doing something positive. Perhaps another way is to upskill and take some marketing course/education yourself so you're better informed when the marketing gurus come calling?
Review Your Pricing Model - As a Small Business Owner you're in an incredibly competitive environment, so it behooves you to consider what your customer is thinking when comparing your service to others. They after all, will generally have an abundance of choice as to where they spend their dollar, and you want them to pick you. So make it easy for the customer to understand. Will your busy attract more attention if you offer a pricing model different to your competition? Are you able to make the terms more favourable for your potential customer so they choose you when deciding to purchase?
Undergo a Labour Review- This is always a tough one. As the people and culture within an organisation give it its flavour, and subject to price, people still like to buy from people they like. As part of any continuous improvement process as a Small Business Owner you must evaluate the effectiveness of your team. In order to be able to keep that cheque account in the Black it may be necessary to make that hard call. There are few people who relish letting team members go. But making the hard call may be necessary to ensuring the continued profitability of your small business. It's a bit like the floating door scene from the Titanic where Jack makes the sacrifice and leaves Rose floating on the door...(They both could have fitted...) Now find out 5 Easy Ways to reclaim Time