Effective Ways To Rev Up Your Profits
Watch the costs and the profits will take care of themselves
"My business is not making desired profits'.
"My unit hasn't shown any progress in the last financial year'.
"My business profits are dwindling away'.
If any of the above has been your concern, it's no rocket science that you are definitely working hard, but in the wrong directions. Marcus Lemonis, CEO of the Camping World best frames it, "If you don't work for it, why do you think you deserve it?" Here are some quick fix solutions that'll aid in revving up the business profits considerably.
1. Goals with planning and calculations
Organizational goals must be mandatorily planned and calculated in terms of numbers. Sales goals, product-wise revenue targets, branch-wise goals, manpower planning must all be clearly quantified. Nothing should be an estimation or assumption. Data must support each decision in every aspect of business.
For example, if the salesman says he is targeting Rs.1,00,000 sales on a day, you have all the rights to out rightly ask him to support his estimate in terms of data as to how many are his target customers and what's his average conversion rate. All this ensures that nothing is left to lurch and things are meticulously planned.
2. Raise the marketing efforts
Give your business an instant overhaul by making its presence felt online and promote marketing through online tools like facebook, instagram and twitter. The use of blogs, social media, referral selling, affiliate marketing, and the business website play a predominant role in creating the need for the product and addressing the customer queries expeditiously. The more the product reputation goes online, the better and faster would be the sales generation.
3. Focus on sales
Profits and sales are absolutely synonymous. "It should be a thumb rule to spend an hour daily on the sales, sales targets and taking feedback from sales managers," says Parvin Daryani, founder of A & A Business Consulting. The business should take stringent measures to increase sales by adding sales prospects through diversification in marketing, building long-term relations with existing customers and retaining them through better policies and aiming at referral sales.
The enterprise should be well equipped for innovations and diversifications keeping in mind the constantly evolving markets as well as fluctuating customer loyalty in wake of cut-throat competition.
4. Reducing the cost of operations
It's absolutely no-brainer that profits will shoot once sales are higher and costs of productions lower at each stage. The costs of operation are directly related to the quality of the product as well as the lives of employees.
However, an in-depth analysis of recurring costs has to be done periodically so as to uncover inefficiencies. One example is reviewing the salaries of employees and may be hiring two relatively lesser salaried employees instead of one highly paid employee to boost efficiency and bring down cost. Also one can outsource work which can be easily done at lower costs outside. "I started commuting with my son in the same car so as to bring down the travel costs and be environment-friendly," says Mr. Vimal Gupta, owner of New Idea Farm Equipment Company.
You should start automating the financial accounts and inventory records so as to minimize the need for human employees as well as escalate speed and accuracy of the data processing. The advent of technology and the innovative software developments have made bookkeeping and other records manageable at the tip of the finger.
"Watch the costs and the profits will take care of themselves', quotes Andrew Carnegie.
5. Review mechanism and follow-up
Pravin Daryani, (A&A Business Consulting) strongly recommends that there should be regular feedbacks from production and sales teams to ensure timely appraisal and review of the policies.
Each employee who is delegated a task should periodically report to the boss regarding the progress as well as lacuna, if any. This would make sure that employees are disciplined and no deadlines are taken for granted.
In the world of "dog-eat-dog' competition, employee efficiency plays a significant role in capturing market in terms of new opportunities as well as retaining the market share. Follow-up should also be automated to make it faster and employees are reminded of their impending deadlines.
Warren Buffet beautifully concludes the rule of success- focus on your customers and lead your people as though their lives depended on your success. Business exists to make profits and you should not leave any stone unturned in making your enterprise a global name.