Editor's Note: Take a look at our featured best practice, Organizational Design Framework (70-slide PowerPoint presentation). Organizational Design (OD) is a structured approach to aligning the structure, processes, and systems of an organization to achieve its strategic objectives and enhance performance. It encompasses various components, including defining the purpose of reorganization, determining supportive [read more]
3 Things You Can Do to Make Your Business More Profitable
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The business world has always been cutthroat and unforgiving, but in the current climate it is even more so. In times of economic volatility and uncertainty, it is important that businesses shore up their financial positions so that they can be somewhat shielded from potential market volatility. For large corporations, there are a range of financial instruments that can be deployed in order to protect large investments. However, for smaller businesses, a more realistic defense against this volatility would be to take measures to increase profitability and strengthen the business.
Profit is a key indicator of a business’s health, it is the main metric by which investors will value your business, so in order for a business to command confidence from the markets, it needs to be consistently profitable. Profitable businesses have a much easier time finding outside investment, as well as obviously generating more money themselves. Here are some of the simplest yet most effective tactics that you can use to make your business more profitable than ever before.
Invest Profits Wisely
The key to sustainable growth in business lies in the decisions that are taken with regards to reinvesting and using any existing profits. If you make poor choices with the money that you are making, then you will struggle to build your infrastructure and capabilities in a way that will help to drive growth.
If you take the story of any self-made millionaire, then you will almost certainly discover that their success has been built on making smart investment decisions with any money that they do make. Consider this list of child celebrities from highersalary.com, those big paychecks they got as kids couldn’t last forever, but many of these celebrities have gone on to pursue other creative and business ventures with the money they made.
Set Goals
Your sales team will have a much easier time assessing their own performance and adjusting it if necessary, if they know exactly what the standard that they are aiming for is. As a business owner, you should always know what direction your business is headed in, in both the short and long term.
Setting attainable goals is also an excellent motivational tool. As your team completes their goals and hits their targets, they will become increasingly motivated, which in turn allows you to set slightly more ambitious targets. This way you can encourage your team to develop their skills and drive bigger profits.
Automation
Automation is quite simply the process of outsourcing certain tasks to a computer or software package, which will then perform a function automatically that usually would have to be done manually.
Always be on the lookout for opportunities to introduce automation into your business. There are numerous day to day processes that can easily be automated, in particular payroll processing and end of day reporting are common targets for increased automation.
Making a business more profitable should be a constant aspiration for any owner, one that needs to be present at all levels of operation. If your managers and your other workers at all levels see that you are serious about profitability, then they will follow suit.
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Product Lifecycle Analysis is an invaluable tool for developing a robust product marketing strategy. Marketers and strategists can use this analysis to predict sales growth, associated customer and competitor behaviors, and, in turn, devise the appropriate product marketing strategy.
The Product [read more]
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About Shane Avron
Shane Avron is a freelance writer, specializing in business, general management, enterprise software, and digital technologies. In addition to Flevy, Shane's articles have appeared in Huffington Post, Forbes Magazine, among other business journals.
