Five Ways to Improve Business Profits
Whether you’re already running your own business or planning to launch one soon, you need to know where your profit is coming from. But you also need to know where you’re missing out on potential profit so you can change tack.
Here are some of the snags people run into, along with tips on how to avoid them or get out of them if they’ve already caught you.
Manage Your Time
When you run your own business, you’re the boss, and it can be both a blessing and a curse with twin dangers. You either procrastinate to the extent of never getting anything done, or you can’t stop working and burn yourself out. Bad news from both sides.
If time keeps getting away from you, try these tactics:
- Be your own boss and set work times. If you find it hard to get started, make being at your desk for a certain time in the morning your priority. If you find it hard to stop, make knocking off time set in stone.
- Work in timed blocks if you fight distractions while you’re working (or if you have trouble getting started). Anyone can focus on a task for ten minutes, so set your timer and dive in. When the timer goes off, you can stop if you want to, but having got started, you’ll find it easier to continue.
- Organise your workspace so everything you need is to hand.
- When you’re working on the computer, close your personal social media accounts.
- Create a dedicated work area if you work from home, so you get that psychological ‘going to work’ feeling. A spare room is great, but a communal room can also become partly office space when you install a workstation for the computer, shelves for reference materials and stationery, and maybe a room divider for a little privacy.
Cut Your Overheads
It’s amazingly easy to end up with a multitude of business expenses you don’t need. They eat into your profits and can sap your motivation if you end up feeling like you’re working just to pay the business bills.
Little things like web hosting, for instance, can mount up. Make sure you’re not paying over the odds for your webspace or for add-ons you don’t use. Don’t be scared to switch your web host if you find a better deal.
Bank charges are another expense that can rack up. Keep an eye on what you’re paying each month, and investigate alternatives if you find your current bank is piling on the charges.
Create a Professional Public Face
Appearances can be everything in business, improving your perceived status and standing in the community.
Trying to work from home, for instance, if you need to host meetings with clients, may not give the most professional impression. Traditional office space can seriously eat into your profits, but an alternative solution is a flexible office where all expenses are built in. Short contracts also mean you’re not locked into a long lease, so your risk and commitment level is much lower.
Other easily accomplished things that can help lift your professionalism include:
- Business cards. Yes, people do still use them.
- A well-designed and up-to-date website.
- A prompt and friendly response to queries or customer/client questions.
You’re more likely to achieve better prices (and make bigger profits) when your business appearance is professional and polished.
Control Your Stock
If you’re selling physical items, stock control is a major factor in profit levels. You need to know how much stock you hold, when to reorder, and where things are, so you don’t waste time hunting items down.
Self-storage units are popular sites for online retailers or resellers, with many facilities welcoming business users. You can install freestanding shelving or cabinets and hanging rails, and including a table or desk also means you can pack up your sold items without carrying them somewhere else. Being able to quickly upgrade your room size or rent an additional room means you can take advantage of seasonal bargains and know you’ve got storage space for them.
Having found your ideal space for stock storage, make sure you organise items so you can quickly locate them.
- Keep your fastest sellers closest to the door.
- Organise your shelves and label them, so you have dedicated storage areas for each item or category.
- Use transparent tubs if you don’t keep items in their original boxes. These help you see immediately what you’ve got, again saving time and acting as a visual reminder to reorder.
Understand Your Finances
Accounting is a big part of running a profitable business. You can open a subscription to an online accounting service that will help you keep track of expenses and invoices, or set up your own spreadsheet if you’re good at that sort of thing.
HMRC offers lots of help to business owners, including webinars recently. If you’re not sure what you can claim for business expenses
A bookkeeper or accountant would also be a worthwhile expense if you struggle with the daily upkeep of your books, saving money in the long term.
Just being aware of some of those potential problems and the ways to avoid them can give food for thought in the way you run your business. Hopefully, changing up one or two things can see you on the way to greater profitability.
This is a collaborative post.
