We all want to build businesses that will support themselves and our own financial future comfortably. Profitability plays a big part in that.
Financial instability is a great cause of stress, and we don’t want that for you. We like to guide our clients into habits, mindsets and actions that create sustainable long-term wealth, not one-hit wonders. If one of your goals this year is to make your business more profitable, we’d like to share with you 6 practical ways to achieve that.
1. Let go of the past
Whatever your feelings are about your business in the past year or so, let them go. Don’t hang onto emotions like regret, fear or even pride and joy. Wipe your emotional slate clean and look at the future with fresh eyes.
Whatever you did last year, you can do better because you now know better.
How your business performed previously is only relevant in what knowledge you can gain from it. You may have made mistakes that you need to learn from. You may have made some excellent business decisions that you need to remember and recreate.
The educational lessons you have to gain from the past year should be kept with you, but the emotions of it, you can let go.
2. Review and reinforce your values and goals
Reflect on why you started your business in the first place.
- What was driving you?
- Are these still the things that are most important to you?
- Are you on track to achieving them? If not, why not?
- When you are reviewing your values, don’t just think business, think about your work-life balance too.
- Did you start your own business to be able to support your family financially, or, to have more flexibility and time with them?
- Did you want to build a legacy that you can pass on?
It is easy to lose yourself in the minutiae of work and forget about what is driving you. We find it very motivating to check-in with your business goals regularly. Restating your goals can help you get fired up again.
3. Increase the knowledge and skills base of your business
While it is natural to get caught up in the day to day running of your business, this is only how to keep afloat, it is not how you get ahead.
To improve your business, increase knowledge and skills within the business.
Some ways you can do this include:
- Taking courses to improve your/your teams expertise, business or marketing skills;
- Upskill yourself or specific team members to increase what services you can offer as a business;
- Hire someone who has skills you don’t to expand your offering;
- Outsource particular areas of your business so that you can focus on serving your clients or developing your business;
- Research new sources and systems for streamlining or cost-cutting opportunities;
- Survey existing clients to find out what needs they have that are not being met.
4. Trim the fat
Making changes to improve your business’ profitability isn’t always easy; you may need to get a little bit ruthless. Cut areas that are not working, no matter how much you wish they were.
Review your clients. Every business has clients that they hang onto for sentimental reasons even though they don’t particularly fit your service model any more, are drain on your time and energy, are requiring service or resources that you don’t offer to new clients any more.
Streamline your service offering. If you spread yourself too thin, you will never have the strength, systems or resources to scale the business. Work out what you do well and focus on that.
Cut costs. Removing systems, services, staff, and adhoc spending that don’t serve your business as best as they could/should be, will improve your business profitability. The same goes for reviewing all of your subscriptions – we’re willing to bet there are a few regular expenses that you don’t even know what they’re for any more!
5. Embrace online business
You may have already started this, but if you haven’t yet embraced how much business you can bring in from online channels, then this is your wake-up call.
Social media, email marketing, an informative and user-friendly website, digital advertising… all help you connect with existing and potential customers, as well as peers and communities.
Building your business presence online is a great way to expand and grow your profitability as your marketing can be highly targeted to the right types of people, and it’s more cost effective than traditional marketing.
6.Think bigger and believe in yourself
The whole focus of this article is how to increase your business profitability. In order to grow your profits, you have to think bigger, and then believe that you have the power to get there. There is a great saying:
‘If you think you can, or think you can’t, you are right.’
Again, the everyday slog prevents you from doing this, but right now take some time to ignore the everyday slog, and imagine a business that’s as big and as wide as you want it to be. What could you achieve?
- Are there other services or products to compliment your existing offering?
- Could you open other business sites across the country or the world?
- Can you expand into new markets?
- Can you expand your online presence?
- Are their collaboration opportunities within your network?
- Are there larger contracts you could be tendering for?
- Could you source investment to expand?
- Could you licence your product?
- Can you create a passive-income opportunity from your services?
- Could you offer a franchising or business opportunity?
- Can you upskill some team members to create a new or premium service?
Get your head out of the everyday workload and look to the future.
To achieve the financial goals you desire, the first step is review, followed by planning, then most importantly implement and refine.
Get in touch with our Think Big business advisors to get strategic advice on how you can improve your business profitability. Book a time to talk to an advisor HERE.