For many businesses, the journey to rebound and build profit is underway. Will you focus on sales and hope you can get back to where you were? Or will you apply your resources to building a better business in 2021? One that is profitable and sustainable. And admired and respected. A business that can quickly adapt – even in a pandemic.
The secret to such a business? Build a strong foundation and leverage all areas of your business – marketing, sales, operations, people, systems and finances. This whole business approach, which I call the “hybrid way”, is a proven recipe for growth and sustainable profit in any small business.
Here are 7 business improvement opportunities to help you build profit as you rebuild your business
Planning
If you want to take a different path, you need a roadmap. In this case, some clear goals with specific actions you need to take to achieve them. A simple action plan will provide clarity and focus. And with all the changes over the past year, this is a good starting point for rebuilding.
As you put together your goals and tasks, think beyond revenue. While sales growth is important, here are some additional things to consider: product or service mix, customer retention, productivity, efficiency, hiring or outsourcing, system development, distribution channels, and power partners.
Products/Services
For my clients and other businesses, the ability to quickly modify services or change how they were delivered had a big impact on their business in 2020. A few client examples include:
- A medical practice Introduced telemedicine visits and drive-thru flu vaccines
- When out-of-state travel required quarantining, a volleyball academy introduced local leagues and clinics to temporarily replace national and regional teams.
And I’m sure many of you enjoyed the outdoor dining or take-out options from your favorite local restaurants. Or maybe curbside pickup from your favorite retail store or boutique?
And the best part is that these new services don’t need to go away. Businesses continue to offer them, along with their traditional (pre-pandemic) services. It’s a win-win for the business and its customers.
So why do you need a pandemic to give your products and services a facelift? You don’t. Technology, competition, and customer needs will continue to change over time. Make sure your products and service keep up!
Promotion
Sales don’t just happen. It requires an investment of your time and money. Most of all, it requires consistency. Something you do frequently – not simply when sales decline or you have time.
So, what are you doing to attract new customers and to keep existing ones coming back and referring others? To build profit, not just sales, you need to invest in both. As the past year taught us, a loyal customer base is priceless. For many small businesses, these were the customers who kept them afloat. So make sure your plans include activities to generate new customers and retain your existing, loyal customers.
Systems & Processes
Streamlining and standardizing procedures makes daily operations easier, efficient, and more effective, whether you are there or not. It also made it a lot easier for businesses to quickly pivot and go in new directions.
During the past year, we saw many businesses add new services, modify delivery options, change payment methods – and even change how their people worked. They all require system changes within the business. When a company values both systems and people, making changes is easier and more profitable.
Why wait for a pandemic to address the systems issues in your business? Make it more of a priority. Start with a few. Focus on those that save you time, increase sales, or fix problems that consistently erode profit.
People & Teams
No business operates successfully in a vacuum. We all need help from others. While we often associate people with employees, building a strong network of contractors, vendors, and alliance partners for your business is also important.
The past year has been difficult for employers and employees. Uncertainty has a way of doing that. Work-life balance and working from home have changed expectations. The future will look different than the past. But with it comes opportunity. As the leader, you have the ability to rebuild your team and the culture of your business. Take advantage of it and long-term you will come out ahead.
Professional Development
As you learn and grow, so will your business. Make a commitment to learning and building new skills and knowledge. Did you know that if you read (or listen to audiobooks) for 15 minutes a day, you will read about 12 books each year? What a learning opportunity!
Want to be a better leader or improve your productivity? Maybe you want to improve your technology, sales, or marketing skills? Need any ideas to improve cash flow or build profit? Read a book, listen to a podcast, take an online class. There are plenty of resources available today. It simply requires a commitment to invest in YOU.
Financial Mastery
Sales are important, but cash flow is king and profit is your reward for excellence in entrepreneurship! You don’t need to be an accountant or financial guru, but you do need to track and understand the numbers that drive your business’s success. Beyond sales, here are a few others to consider: average sale per customer or transaction, the number of leads, sales conversion rates, revenue per employee, average accounts receivable, gross profit margins, customer retention rates, and net profit.
Monitor them and focus on activities that help to improve them, especially gross profit margins and net profit. If you keep them at the center of what you do, your small business will continue to serve your needs and the needs of your team, vendors, and customers.
Remember, little improvements in ALL these areas will put more profit on the bottom line and in your wallet. So, build your goals and plans with them in mind.
Need a different perspective?
Would another set of eyes, ongoing support, and accountability from an expert help you get on the right path and quickly rebound? Let’s explore the possibilities with a brief, complimentary consultation. Click here to schedule your free exploratory session.
About Joan Nowak. As a business improvement expert, business coach, and consultant, I’ve been helping entrepreneurs turn ideas into profits for more than a decade. My whole-business approach empowers clients and drives improvements in key areas including revenue, operational performance, team development, customer satisfaction, and profitability.