12 Ways to Make More Profit in Your Business
1) Cash is King but it’s not the only thing. Sales, marketing, operations, product and service development, quality, innovation, customer experience, and financial management are among the other key disciplines that are critical to driving profit.
2) Cash is a by-product of all the non-cash disciplines in the previous bullet. Their cumulative success drives cash, so invest in those disciplines appropriately.
3) Create active cash management through the use of a thirteen-week-cash-flow forecast. Start with an opening cash balance then forecast and record your accounts receivable and accounts payable amounts and their expected timing. Do the pluses and minuses to determine if you have enough cash to pay your upcoming bills. If not, you may have a crisis on the horizon so design a get-more-spend-less plan pronto!
4) Get an “outside-in” perspective by taking the customer’s perspective in everything you build, sell, do. Employ observations, workshops, surveys, research to understand the customer. Innovation methodologies are great tools to truly sense intent.
5) Undertake fact-based disciplined market analysis to identify customer needs; product strengths and weaknesses; competitor strategies, strengths, and weaknesses; near-term issues; and each line of business economics. Let these facts drive your strategy.
6) Emphasize sales by developing a revenue growth mentality. Focus on gaining new clients and upselling existing clients. Develop strategies that attract competitors’ clients, convert non-buyers into buyers, and increase per-purchase dollar value of each sale.
7) Keep costs in check by examining fixed and variable costs. Look for opportunities to reduce and or eliminate expenses where costs seem out of align year over year or when compared to competitor costs. Keep your long term goals and funding needs in mind so do not equally across the board.
8) Align employee rewards with the desired things you want them to focus on. People do what they are rewarded for. If you change strategy, change the related processes and the rewards. It takes substantial thought and effort to realign but it is so-so important to get this right!
9) Create a social media program to create “awareness-to-sale” actions by clients. Don’t get distracted or fooled by vanity measurements such as ‘likes’ or ‘retweets’. Sales gained is your real social media KPI.
10 )Create a balanced scorecard of key financial, operational and customer metrics. Watch it closely and review it often. Anchor your decisions to the scorecard, not the daily distractions that may arise.
11) Be a learning organization. Develop a set of required core knowledge competencies including corporate and industry knowledge, technical competencies and personal growth. Ensure that personal growth emphasizes collaboration, communication and relationship building skills.
12) Protect yourself from bad things happening. Create an enterprise risk plan to protect the downside and react to threats to your goals. Determine the probability and clock speed to death of each threat so you can mitigate effectively. Be acutely aware of risk, but don’t focus on it so much that it curbs your every move.
Rob Hall is the CEO and founder of RKH Consulting. Rob has 20 years’ business advisory experience, including working at a boutique hedge fund and as an investor relations specialist at a public company. He passionately reads about business successes and failures and has researched 100’s of cases studies to expand his strategic arsenal. Like a mystery novel, he analyzes the clues of a company until a successful outcome can be determined. It is within this framework that he founded RKH Business Advisory Services and created the RKH Recalibration Framework.