7 Ways To Boost Profitability Of Your Business
December 20th 2006 03:30
Many business owners work really hard just to break even or keep afloat in their ventures. The question to ask yourself is are you directing your effort in the right places to get the reward you want? I've seen many businesses in which, business owners "mis-spend" or work hard but on the wrong things. Here are 7 of the most common areas where the return on your efforts can really be ramped up:
* Marketing consistently
Once you have committed to run your business, you must be equally committed to marketing and selling the products and services of that business. Create a simple marketing plan that includes marketing activity every day, every week and every month. Formal marketing activities such as advertising, promotions and writing ; with informal activities such as making new contacts and the power of talking to people about what you do. It is difficult, if not impossible, to stay and remain profitable without a commitment to ongoing concerted marketing.
* Asking for the sale
The most effective way to "ask for the sale" is to practice asking for the sale in language that you are compatible with. Write down what you want to say first, then practice it over and over. There is also plenty of stuff out there on handling objections. Prepare your responses to the most common objections so you are well armed before you speak with your prospective customers. If you find it difficult to "ask for the sale", you can be sure that you're not bringing in as much money as you could be.
* Getting help
Ask for help straight away for areas you aren't strong in. Most business owners struggle on doing the stuff they aren't suited to, this builds inefficiencies and potential for mistakes into
the business. Each day that goes by with your business running at less than maximum efficiency, means money lost from your pocket. Work out where you add the most and least value in your business. Pay someone to help you out with these low value added activities. Your time is best spent where you add the most value. If you can do more of this kind of activity, your business will benefit.
* Keep working on your existing customer base
Follow up with past customers on a regular basis to increase your profitability potential. All
the research tells us that it is easier and cheaper to keep working with customers you already have, than to get new customers into your business. Develop strategies to keep your customers with you, such as loyalty plans, regular communication and special offers. Implement a regular process for following up your customers after they buy from you.
* Managing expenses
Regularly appraise your business expenses and find ways to reduce costs without sacrificing quality. If you're not practicing cost analysis lately, you might be paying more than you need to be, which will reduce your profitability. Review expenses and negotiate for adjustments at least once per quarter. Categorize everything you spend under three headings: essential, nice to have and non-essential. Everything in the last two categories are up for grabs, be ruthless!
* Slick marketing materials
Glossy brochures, classy graphics or videos are a nice addition to more active forms of marketing such as meeting people, calling people and speaking to people. Marketing materials are an expense, so be sure they are working, you need to get some handle on the return on your investment. At the very least, you should be tracking where new business is coming from so you can get an idea of whether your marketing materials are contributing to any new business you get.
* Value-adding activities
If you are spending the majority of your day completing tasks which are administrative in nature and or which can be easily completed by other people, then you are not putting yourself to best use. For most of us, the best value-adding activity we can be involved with is in bringing business in the door by building relationships, talking to prospective customers and promoting our business.
* Marketing consistently
Once you have committed to run your business, you must be equally committed to marketing and selling the products and services of that business. Create a simple marketing plan that includes marketing activity every day, every week and every month. Formal marketing activities such as advertising, promotions and writing ; with informal activities such as making new contacts and the power of talking to people about what you do. It is difficult, if not impossible, to stay and remain profitable without a commitment to ongoing concerted marketing.
* Asking for the sale
The most effective way to "ask for the sale" is to practice asking for the sale in language that you are compatible with. Write down what you want to say first, then practice it over and over. There is also plenty of stuff out there on handling objections. Prepare your responses to the most common objections so you are well armed before you speak with your prospective customers. If you find it difficult to "ask for the sale", you can be sure that you're not bringing in as much money as you could be.
* Getting help
Ask for help straight away for areas you aren't strong in. Most business owners struggle on doing the stuff they aren't suited to, this builds inefficiencies and potential for mistakes into
the business. Each day that goes by with your business running at less than maximum efficiency, means money lost from your pocket. Work out where you add the most and least value in your business. Pay someone to help you out with these low value added activities. Your time is best spent where you add the most value. If you can do more of this kind of activity, your business will benefit.
* Keep working on your existing customer base
Follow up with past customers on a regular basis to increase your profitability potential. All
the research tells us that it is easier and cheaper to keep working with customers you already have, than to get new customers into your business. Develop strategies to keep your customers with you, such as loyalty plans, regular communication and special offers. Implement a regular process for following up your customers after they buy from you.
* Managing expenses
Regularly appraise your business expenses and find ways to reduce costs without sacrificing quality. If you're not practicing cost analysis lately, you might be paying more than you need to be, which will reduce your profitability. Review expenses and negotiate for adjustments at least once per quarter. Categorize everything you spend under three headings: essential, nice to have and non-essential. Everything in the last two categories are up for grabs, be ruthless!
* Slick marketing materials
Glossy brochures, classy graphics or videos are a nice addition to more active forms of marketing such as meeting people, calling people and speaking to people. Marketing materials are an expense, so be sure they are working, you need to get some handle on the return on your investment. At the very least, you should be tracking where new business is coming from so you can get an idea of whether your marketing materials are contributing to any new business you get.
* Value-adding activities
If you are spending the majority of your day completing tasks which are administrative in nature and or which can be easily completed by other people, then you are not putting yourself to best use. For most of us, the best value-adding activity we can be involved with is in bringing business in the door by building relationships, talking to prospective customers and promoting our business.
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