How to improve profits in 7 practical ways
Growing your business means more cash for you now, plus a higher sale price in the future when you decide to eventually sell your business.
We’ve put together a series of articles full of ideas to help you grow your business:
- Increase your customers
- Find new markets – with existing products or services
- Develop new products or services – to open new markets
Here’s the fourth area…
AUTOMATE PROCESSES TO SAVE TIME
Look at current processes you could change to save time or money. One way could be changing from manual systems to automatic ones to free up time for more important tasks.
LOWER ENERGY USE
Look at each area of your business separately and come up with ways to reduce energy use. For example, if you’re a supplier and you hold your inventory in a warehouse that’s busy 24 hours a day, lighting and heating may be major expenses. Can you switch to cheaper sources?
REDUCE OPERATING WASTE
Identify how to produce more efficiently to reduce leftover materials, which will lower your costs of goods sold. For example, if you manage and own a large department store, are there ways you could reduce total staff hours to lower costs?
INVESTIGATE WAYS TO IMPROVE YOUR OUTPUT
Improve your output to deliver your products or services faster. Add staff, upgrade to the latest equipment, or change software, try anything to speed up production.
NEGOTIATE WAYS TO IMPROVE YOUR MARGIN
It sounds obvious but whichever way you choose to increase prices it all goes straight to your bottom line. Consider the impact on demand if you have price-sensitive customers. For example, you might be a goat farmer selling high-quality meat, cheese and milk. Does your product have any leverage to negotiate a higher price?
IDENTIFY WHAT OVERHEADS YOU CAN LOWER
Audit all your expenses to see what can be lowered without affecting your business operation. Renegotiate with suppliers and reassess any subscription services or set pricing plans.
BUILD A PROCESS TO COLLECT MONEY OWED TO YOU FASTER
Take a close look at your debtors to establish which ones need extra motivation to pay you sooner. Consider changing your policy towards new debtors by tightening payment terms or adding a discount for quick payers. Make sure you have internet banking as an option.