Business profits are essential to any business. Without them you don’t have a business!
You can instantly increase your business profits with only 3 small tweaks. It’s so simple really but will have a massive impact on your business from this point forward. Answer these three questions and you will see an instant change in your profits.
1. Where does your money come from?
Understanding what is bringing your money in.
Most businesses are so busy doing business that they forget to track the most important thing and that is where the money is coming from. Understand the key areas that are bringing in the biggest ROI.
Do you know which key areas in your business are bringing in the biggest ROI right now? Tweet This!What is making you the most business profits right now and what are you going to do about it? This is a key question because if you have a product or service that is making your the most profit then putting more effort and resources into this area will only boost your business profits even more. If you have a product or service that is underperforming then either find out why or just scrap it and post on the ones that are doing well. Less is more – focus less on what’s not working and more on what is.
Most important, keep a very clear picture of all this by using a cashflow forecast. No matter what, it is essential to always know exactly where your money is coming from and where it is going.
Get your cash flow forecast template here.
2. Where is your money going to?
Changing your mindset from expenses to investment
Business profits occur when your income is higher than your expenses. So no matter how much money is coming in, if your expenses are growing proportionally then you will never see an increase in profit. We want to help you make more profit not more money. So let’s focus on where your money is going to so that we can determine how to increase your profit margins.
Do you have a budget and cash flow forecast? If not, how do you even know where your money is coming from or going to? Or if you have one how often do you take a look at it or do you leave that up to your finance department? If you are responsible for the business growth then no matter what your title is you need to have a handle on the numbers and a look out for money leaks.
With a little tweak in your vocabulary, you can save a fortune. Stop using the work expenses and start saying investments. Expenses are money spent that you will never see again and investments will bring your money back to you with a return. As soon as you start using this mentality you will quickly be able to identify unnecessary expenses and eliminate them.
For example, do you use LinkedIn premium? If so is it an expense or an investment? The only way you will know is if you have a clear strategy to use it to make a profit and a way of measuring if it is actually working. So either stop using LinkedIn premium and go to the free version or make sure that it is an investment and yields a regular return.
The same applies to people, are you spending time on your people or investing time on them? The one will just use up your time and the other will yield a return. If you know what you want to get out of your time spent with your people then you will know if the time spent with them is an investment or a return. More about people in the next point.
To start getting a handle on your expenses or investments, get your budget template here.
3. Who is bringing in the most money?
Building your super tribe effectively
Who is bringing in the most business profits right now and what are you going to do about it?
You will have super customers and super fans as well as super staff members. Who are the ones who are really bringing in your business profits and how can you 1) reward them and encourage more and 2) create more of these ‘super people’? Answer these two questions with a clear strategy and stop focusing your time and energy on winning back the haters. You will see an instant rise in your business profits as a result.
Super customers
What do you do to reward your super customers and are you keeping in touch enough to keep them buying from you over and over again? You already know that they love what you have to offer so how do you keep them coming back and bringing others with them creating even more super customers?
Super fans
Super fans aren’t buying from you for one reason or another but they massively support what you do and spread the word.
Super staff
Do you have the right people working for you? Get the wrong people off the bus asap and do more for the right people. Your super staff are passionate about what you do, they buy into the bigger picture and work for the greater good of the company not just for what they can get out of it. The right people already come motivated so they don’t need motivating but your job is to understand what they need to keep them passionate about the big picture.
Are you helping each of your team members to maximise their contribution?
See our wide range of HR documents here or get in touch if you would like us to recommend an HR professional to you.
Did it work?
We would love to hear from you! Did our 3 tweaks work for you? Share your results in a comment below and keep an eye out for the next useful post to support you in your business.
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