Six Sure-fire Strategies for Increasing Your Profits
By Dan Boudreau
Profit is the lifeblood of any business. Effective business owners have one eye on the bottom line at all times, and it’s no wonder—a business that doesn’t earn a profit will quickly wither up and disappear.
In the interest of boosting profits or reducing costs, sharp business managers are always on the lookout for time and money wasters to eliminate. Here are seven strategies for increasing your enterprise’s profitability.
1. Focus on the ‘highest and best value’ products and services. Whether starting a new business or growing an existing one, it’s important to go after the low hanging fruit. Applying the Pareto principle, 80 percent of your revenue will come from 20 percent of your efforts. Drop the poorly producing goods and invest in the profitable ones.
2. Add more revenue streams. Sometimes the path to profit is as simple as adding more products or services to the mix. In doing this, it’s important to know what your core business is, and to ensure that any additions fit into your vision and mission. Resist the urge to try to be all things to all people. Know who your customers are and figure out what else they need.
3. Survey your customers, tap their wisdom. You will never go too far wrong by listening to your customers, and today they’re more informed and smarter than ever. Seek your customer’s ideas through surveys, focus groups, or informally by asking the right questions each time you interact with them.
4. Identify inefficiencies in your business, fix and streamline them. Working in your business, you may already know of areas that need to be improved. Some processes will benefit with a few minor adjustments, others might need a major overhaul. Sometimes it’s more effective to have an independent consultant do an analysis on your operation to identify inefficiencies and suggest ways to improve. Eliminate anything that wastes time, money or energy.
5. Sell more of the goods you’re already selling. Perhaps it’s time to ramp up your marketing efforts to capture a bigger share of the market you’re already in. This might mean devoting more time or resources to selling, or partnering with other agencies for mutual gain.
6. Go online. If your business is a bricks and mortar operation, perhaps it’s time to step up and invest in setting up a brochure website or an online shopping cart. Once you navigate the learning curve, selling online can add a whole new dimension to your business, while increasing your bottom line. Sometimes comfort zone is the biggest barrier to changing how we do things. As an owner, it’s easy to get busy working in our business, leaving little time or energy for making improvements to the business. Over time, it’s easy to drift into dysfunctional practices. After doing something a certain way for a while, sometimes for years, we become oblivious to it and just keep on doing it that way because we’ve always done it that way.
Change will be uncomfortable at first. But if you’re willing to make the effort and brave the first few hurdles that come with change, you and your business are bound to benefit as the newer, more efficient methods begin to bear fruit.
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“Dan Boudreau is President and CEO of Macrolink Action Plans Inc. and the RiskBuster Business Plan Oasis at http://www.riskbuster.com Writing your own business plan can be easy, fast and fun! Instantly download a free copy of Dan’s popular fast-track business plan template, The Shell™, when you subscribe to the RiskBuster Business Plan Insider at http://www.riskbuster.com”
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