10 tips to help you become profitable in 2012
Here are some of my top 10 tips to help you become profitable in this new 2012 year.
- Identify your core clients. These are the clients that always pay you, always pay on time, you love working with. Anyone who’s not on this list should be dropped if possible.
- Raise your fees. I understand that many people are afraid of raising fees in the economy that are currently in. However, if your service or product is good, your clients believe in the service or product, and the market that you’re in is not extremely competitive, this may be a good option for you.
- Invest in business development. Many companies, if they know number one, can hire sales teams and cold callers to go out and get additional business of the type they need or are looking for. Some of these services are much more reasonable in cost than you would think!
- Develop your core competencies. Many companies, especially in the current environment, have attempted to expand the reach to get any dollar they can from the client. Often this backfires. I believe the company should focus on the core competencies and not work on areas outside of this.
- Reduce your delivery costs. When is the last time you looked at your “plan B’s”? A Plan B is what would you do if your current way of doing something were to suddenly be terminated. Have you looked into alternatives to your courier service? Do you have a family member or friend who is currently out of work and to do such jobs for cheaper? What about the Postal Service? Perhaps its cheaper than your regular UPS?
- Improve efficiencies. Every time you have to redo work it loses your profit. what can you look at in your business, what systems can you implement, to make sure that you do not need to redo work? do you have a flowchart that you have analyzed about how various projects flow through your office? Perhaps you can find some efficiencies there?
- Deal with underperformers. Underperforming staff, clients, vendors can all cause major issues in your business and put a strain and drain on your profit. If you can try and get rid of underperformers as quickly as possible. At least this will cut the bleeding!
- Lower overhead. Many times, especially in the good times, a business will expand. It will open up additional offices, get additional equipment, get additional staff, etc. If you are in a pinch now what can you look at in your business as it currently stands that may help you get rid of overhead? A creative way that I have seen this done is to offer a $50 gift card for every idea that saves the company over $500 a year in overhead expenses.
- Expect more from your people. The people that work for you want to work. Most of the time they like their job, and they want to do a good job at it. If you give people goals and help them measure them on a quarterly basis it will help them expect more from themselves and therefore you can expect more from them.
- Improve realization. Make sure that you are challenging all discounts, challenging all write-downs. It is important you know what items are being given away for free and why in the company, especially if you’re having issues with profitability.