Do you want to increase the profit you’re generating from your business? Not sure how to go about it?
If not, read on because you’re about to learn 12 key strategies that will get both your P&L and your bank account into the black.
1. Get the best people on your team
Get the right people in place and your business is almost guaranteed to succeed. Recruit people who have the skills and abilities to do the job, who are team players, who have a great attitude, and who are willing to sing the company song.
Don’t settle for second best because that’s all you can afford. Surround yourself with great people and you’ll never see red ink on your P&L again.
2. Build rock-solid processes
Great marketing without great process is simply a recipe to burn money. Instead of throwing it down the drain, work hard to create systems that produce a consistent result every time.
As the boss, it’s up to you to drive the process of creating processes. Drive it hard because the tighter you get your processes the more consistent your customer service will be.
And we know what happens when you’ve got happy customers.
3. Have enough cash
If you’re starting out, make sure you have enough cash to get your business to critical mass. Lots of businesses underestimate the amount of money they’ll need and the length of time it will take before they reach profitability. When it comes to business, cash and time are one and the same thing. If you run out of cash before you run out of time the gig’s up.
4. Treat customer service as your greatest marketing weapon
You can spend all the money in the world on marketing but if your customer service sucks you’ll go broke.
Spend lots of time listening to your customers. Run focus groups, call them at random, send out surveys and do whatever you need to do to know how good your customers think you’re serving their business.
And remember, it’s what they think that’s key, not what you or your team think.
When it comes to service standards the customer is the CEO.
5. Build great relationships
Invest time in building long-lasting relationships. Of course I’m referring to customer relationships but also with your suppliers, your staff and your competitors.
If you’re not getting a big chunk of your business from repeat and referral clients, start making changes now.
If your suppliers aren’t referring you business, find out why.
And if your competitors aren’t referring people to work for you, start drinking more coffee.
6. Have a clear understanding of what your brand means
Apple understands what their brand means. So does McDonalds. But do you? If someone asks you what does your brand stand for, what are its values, what does your brand mean to your community, could you tell them? Do you know?
If you don’t know what your brand means, neither will your team and your customer base. The sales won’t happen.
7. Invest in top quality marketing
Related to your brand, invest in quality marketing. Everything you do is marketing – everything.
The flies in your front window, the cigarette butts on the footpath, the finger marks on the front door, they all say something about your brand.
For that matter, so does the photocopy-of-a-photocopy of a standard form that you hand out to new clients.
If you look at your marketing and feel even the tiniest lack of pride, screw it up and start again.
Only accept the highest quality. Your customers will notice, your staff will notice, your market will notice. And so will your sales board.
8. The right marketing volume
If there’s one thing that businesses don’t do enough of, it’s marketing and advertising. The old saying is that 50% of advertising is wasted…you just don’t know which 50%.
See the point above about quality marketing then measure, measure, measure.
And don’t give up too early.
The first person to get bored with an advertisement is the business owner. Why? They see it all the time. They take notice of it and they wonder if it’s working. The prospect doesn’t see it until they’re thinking of doing business, which means they might miss the first 5 or 50 times. Then when they’re ready…BOOM! As a quick test, ask yourself when you last saw Bunnings change the style of their ad. They’ve had the same hand-drawn products for years.
9. Build discipline
Without discipline your business is toast. A fat bottom line demands that everyone in your organisation has the discipline to do their part every day. That means vacuuming the floors, cleaning the glass on the front door, answering the phone the same way every time.
It’s the little things that communicate how disciplined you are as a team and that builds trust in the minds of your prospective customers.
10. Expect accountability
Knowing your numbers and being accountable to making a profit is essential. If you have Manager or C-anything on your business card you’d better know the numbers on your P&L and balance sheet.
Seriously, there’s no excuse.
If you don’t want to know, resign. Now. Give your job to someone else. Become a shareholder but don’t expect to hold a position of responsibility if you’re unwilling to be held to account for making a profit.
The same goes for your other KPIs.
Know the key numbers that point to the health of your business. These are the numbers that should be tattooed on the back of your eyelids so you can recite them in your sleep.
If you don’t know your key numbers you’re on the rapid transit bus to the dole queue.
11. Outline a clear and compelling vision
What’s your picture of your business on the day before you sell it? That’s the finished product, that’s what you’re building. If you can’t see that, go, sit cross-legged on a rock until you’re clear about what you’re building.
Well, if you can’t see what you’re building, how are you going to convey that message to your staff, to the people who are designing your marketing, to the bank when you’re asking for a loan to expand? This is something you, and only you, can do.
Sure, include your team in creating a compelling picture but make sure it’s you that owns the process. If you’re not willing to do this, go work for someone who is.
12. Have clear goals
Don’t have goals? Then be prepared to play someone else’s game. That someone else will be your competitors, your staff, or even your bank. Any which way it won’t be you.
Create targets for your business that give your people something to strive for. Make them realistic and give people the resources to measure and monitor their progress.
Turn achieving your goals into a game. Provide incentives, give feedback and let people know your serious about achieving them.
What have I missed? Please leave your best tip for creating a profitable business as a comment below.
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