No matter how much a business generates in sales, if at the end of the day it is not generating a profit, all those sales don’t matter at all. Profit is what matters now and profit is what allows you to grow and expand your business in the future.
Let’s look at five ways to boost profitability.
1. Outsource everything you can:
Focus on activities that generates the biggest bang for your buck and outsource everything else. If your strength is sales, then focus on that. If your strenght is product development, then focus on that and let others take care of work that they can do better at a lower cost. For example, if you have started a company blog but no one to write content for it you can hire content writers. You most likely don’t need a full time accountant. Outsource to a bookkeeper. Other good examples of outsourcing are web development, data entry, cleaning, deliveries. The time you save will pay off many times over for what you spend on outsourcing. You must outsource.
2. Communicate Virtually:
Instead of renting a large office space just so you can have a large enough meeting room, conduct meetings online using one of the popular online meeting services. You can even rent a conference room in a nearby hotel and still come out ahead.
3. Do More of Networking and Less of Advertising:
The cost of networking is minuscule compared to advertising and the referral business that you get through networking pays itself many times over for the time you spend doing networking. Gravitate towards networks where your potential clients might be.
4. Pay your Employees for Mileage:
Instead of providing company cars to key employees, reimburse them every month for mileage. This will save money on maintenance, insurance and repairs plus the cost of investing in cars.
5. Provide Insurance Allowances:
Instead of offering group health insurance, offer your employees insurance allowances. Small businesses usually cannot afford to pay for health coverage but an allowance can mitigate some of the employees costs.
Do you have a tip or two of your own? Feel free to share in the comments below.