A wise person once said that "money and profits can't bring you happiness, however a lack of profits and money can sure cause you stress!"
As business owners, we all have our reasons for being in business. We want to help others, we want the lifestyle of working for ourselves and we want to make money! Nothing wrong with any of that. The problem comes in when we seem to be working harder and harder but not getting further ahead. In fact, many business owners get over their head trying to figure out how to run their day-to-day operations and deal with all the issues that they can't focus on improving their profits. Yet there are some simple ways to increase profitability and lessen your stress by focusing on some key areas
1. Sales - Many business owners think that if they increase sales they will increase profits. Many times by increasing sales, profits will increase. To increase sales, we need to look at three types of customers - prospects who are customers we don't have but would like to have; our existing customers and our past customers - and develop strategies to reach each of these and increase the number of visits.
2. Conversion rates - Online companies are great about conversion rates but how many brick and mortar business owners look at how many customers are coming through our doors and leave without purchasing? What can we do to improve that?
3. Average sales - What are things that you can do to increase your average sale? You have the customers in your business - which is the hard part -now how can you sell them more of what they want?
4. Margins - Think about areas where you can increase your margins. A one percent margin increase on $1 million is $10,000. Many business owners undervalue what they sell because they don't believe that they are creating value for their customers.
5. Cutting Overhead - This is an area of focus when we get into trouble or times are tight but one where when things are good we forget to look at. Are there areas in your business where you can make some cuts that will affect your bottom line? Probably!
Maybe one way of reducing your stress is by increasing your profits. If many business owners improved their performance by 10 per cent in the areas above they would double their profits. Don't try to do it all at once. Instead focus on each area and try to improve incrementally. Measure your results and see what happens. You will be pleasantly surprised.
Dave Fuller, MBA, is a Certified Professional Business Coach in Prince George. He can be reached at [email protected].
