6 Ways to make your business more profitable
Making and keeping business profitable sounds easy enough – simply ensure that your revenues exceed your expenses. In the current economy, this is a stretch for most small business owners.
The good news is that old fashioned profitability in back in style, and modern strategies and tools can be used to assist any business in achieving their earnings goals. Technology is now seen as the business enabler. It’s the key to innovation, reducing costs, enhancing employee productivity and bringing in new clientele. When looking at these benefits individually, we can see that they have the potential to help improve profitability, though when utilised side-by-side, their impact is profound.
- Get an overview of your business
In order to successfully set goals, and ensure that your current goals are aligned, you need to determine where your business currently stands. Up to date data that is compiled in a format that constantly and automatically updates, is deal for decision making purposes.
Once this information is compiled you are also able to develop new strategies and make necessary fixes that are aimed at improving your overall profitability. This data allows you to hone-in your most profitable customers and products to improve your top and bottom-line growth.
This is only one of many reasons that our financial accounting services incorporate Xero Accounting software, which has been designed to offer the business owner this strategic overview, on-the-go and accessible from any device.
- Focus on your existing clientele It is no secret that it is easier to benefit from an existing client than gaining a new one. In a business-to-business environment, cross-selling and upselling are of utmost importance for business growth, and hence profitability growth. This can be done by upselling higher-margin products and developing specials that are customised to your client’s needs.
- Keep your systems connected
Although automated systems assist businesses in making accurate data-driven decisions, it may still not be optimal for operational efficiency, should your systems not be connected.
Viewing data only related to one system at a time, often leads to manual data comparisons which are error prone. Utilising integrated platforms allows your business to easily connect the dots, improve productivity and enhance profitability. Overall time is also saved on day-to-day decision making.
- Take advantage of new markets
As markets changes, customers change with them. Your business may have begun with a smaller service offering, or product range, than it has now. Subsequently, you may find that your business offerings are not being successfully showcased in your current target market.
If you haven’t adjusted your offering, it may be important to assess the current needs of your market to identify how you can improve to bring customers to your door instead of your competitors. If you have, it may be time to begin marketing to broader target markets to match your developments. Exploring new markets to help diversify your revenue streams will also assist in profitability growth.
- Expand to a global market There is a world of untapped consumers outside of your current location. This is what makes exporting a profitable avenue that no business should ignore. Expanding your market to a global scale allows for product sales lives to be extended, reduces your businesses dependency on the domestic market and boosts profitability as the demand cycle shifts between locations. Although global expansion takes time and effort, the rewards are unmatched.
- Finetune your tax, regulatory and compliance activities With an astute financial accounting presence in your business, compliance activities receive dedicated focus, ensuring avoidable losses due to administrative and non-compliance penalties are avoided.