Now is the time to focus on increasing the profitability of your business. Throughout the pandemic your business your business either, capitalized on the circumstances and grew significantly, had minimal impact and essentially generated results similar to the pre-pandemic environment, or suffered a decrease in sales requiring critical course corrections to survive. In any event, if your still in business, now is the time to look at growing your profitability. Don’t let this crisis go to waste.
Over the past year we have had the opportunity to assess virtually every aspect of how we conduct business. Throughout that process we should have found new avenues for providing products and services to others. In the effort to course correct we likely didn’t pay as much attention to the impact on profit margins. Therefore, it’s time to look at our business model, determine what’s working and what’s not, and set a course for accelerating profits as we emerge from this challenging time.
Given the two basic ways to increase profits, sell more or improve profit margins, we need to identify strategies that will help us accomplish one, or both of these strategies. Here are 5 secret strategies to start with. Most businesses miss these opportunities as they are focused on the broad perspectives of sell more and cut costs. Consider these 5.
- Change Your Business Operating Model
You’ve likely already made changes to how you operate due to the impact of the pandemic. Now you need to take a step back and look at what you have and the sustainability and effectiveness of the model going forward. Take this opportunity to refine your operating model to be the most efficient and effective for growing profits.
- Review and Encourage Guerilla Marketing Techniques
If you adjusted your marketing and promotional efforts in the past year, you’ve likely increased their cost. Revisit your marketing and promotional strategies with a focus on implementing guerilla marketing techniques. These will be lower cost and typically prove to be very effective. In today’s environment, consider maximizing the use of technology and social media. But hire the talent to ensure an effective use of these approaches. If they are poorly implemented they will bring poor results.
- Use Your Data to Guide Your Decisions
Capitalize on the fact that we’re in the information age. Using your “gut” to make strategic decisions is unlikely to generate the profit improvements you’re looking for. Using data to determine the highest profit margin products, the biggest revenue contributors, and the costs associated with operations will help you identify where to focus to achieve the greatest profit improvements. If you think you’re using data effectively now, try to identify 5 more ways to use it for improved decision making. The better you get at this the more effective you’ll be.
- Share the Workload
I always find it interesting when business leaders don’t seek out more efficient ways to satisfy operational needs through third party providers. In many businesses there are certain operational functions that can be managed more cost effectively by an external provider than by absorbing the cost in-house. Consider the need for handling all Human Resources activity in-house. This can be very expensive for companies with less than 100 employees. Utilizing a Professional Employer Organization (PEO) for these services can be cost effective and provide significant benefits to the company employees.
- Create a Company-wide Sales Culture
Foster the mindset that everybody in the company is a salesperson. Even those in support and servicing roles have a direct impact on the effectiveness of the sales process. With a strong and appropriate sales culture mindset you significantly increase the opportunity for sales. Consider, providing referral and sales incentives to those outside of the sales team. Everyone wins when sales grow. Let it be known that you support that perspective across the entire organization.
Deploy these 5 secret strategies to achieve greater profitability in your company. Then, continue the thought process. Look for other ways to increase sales and/or profit margin. Be creative and takes this unique time to really accelerate you company performance.