In a nutshell, dollars and cents make up the key success of any business. But how do you improve your profits and set your business up for lasting success? We have developed 7 practical ways to improve your profits, and to help your business thrive long into the future.
#1 Automate Processes To Save Time
It’s no secret that time is money, so it makes sense then that by streamlining and making your processes more efficient you could easily save a few extra dollars. What exactly this looks like will come down to your individual business and it’s needs, but you could for example switch from manual to automatic systems to help streamline the process. It doesn’t have to be anything major, but even the smallest of changes can make a big difference.
#2 Lower Energy Use
Closely examine each area of your business – are there any areas where you could potentially lower energy use? Not only will lowering your energy use improve your carbon footprint and potentially boost your social responsibility, but it could also save you major unnecessary costs.
While we are talking about energy, you could also explore alternative power sources such as solar or wind. As renewable energy sources continue to improve and grow it is important to make sure you do your research to understand if these could be a viable option for you.
#3 Reduce Operating Waste
Wastage is a large cost for any company. So with that in mind, is there something you could be doing to maximise the use of left over materials and minimise the expense?
#4 Investigate Ways To Improve Your Output
Time is money, which is why it is important to think about ways that you could potentially deliver your products or services to customers faster. For example if you upgraded your equipment or software, would this make operations more efficient? While there may potentially be a short term cost, it could potentially set your business up to be in a position to gain extra profits down the track.
#5 Negotiate Ways to Improve Your Margin
It might sound obvious, but if you choose to increase the prices for your product or service, then this difference will go straight to your bottom line. Before you go down this path it is important to do your research as you don’t want your customers to feel like they are being ripped off. Consider what other companies are charging for a similar product or service, and where you sit in the market; for example are you perceived as a luxury product? All of this will play a part on whether you can negotiate a higher price.
#6 Identify Which Overheads You Can Lower
Take a closer look at all of your business expenses. By identifying which overheads can be lowered without impacting the operation of the business, you can improve your overhead costs and increase your profits. This could be done by re-negotiating contracts and pricing with suppliers, to create a better deal or give you the opportunity to explore and build new relationships with different suppliers which could ultimately expand your network and business opportunities.
#7 Build An Effective Process To Collect Owed Money
It is relatively inevitable that at one point or another during your business’s life cycle there will come a time when someone owes you money. By developing an effective process around this, it will help you to avoid any sticky situations and keep on top of things before they get out of hand.
If this is a reoccurring issue, consider changing your policies, payment options and payment terms or encourage on time payments by offering a “pay on time” discount.
As business owners, we are always looking for ways to increase profitability. By following the above strategies and spending time discussing your finances with your accountant, you will be able to closely examine your business and put processes in place to take action and improve your business profits fast.