Increase Your Profits With A Leaner Business
Do you want to generate more profits in 2012? (yes
, who doesn't)
As small business owners and Entrepreneurs you are acutely aware of keeping your eye on the bottom line. If you want to raise that number of what's left over at the end of the year there's 3 ways you can go about it.
1. Generate more clients
2. Raise your fees for your products and services and/or
3. Streamline your business to be leaner, tighter and cheaper.
In this article I want to focus on #3 to give you some great ideas to help you achieve a leaner business.
If cashflow is too thin to invest in bolder marketing campaigns and growing competition keeps crowding you from confidently raising your prices, then the way to ease your cash flow and increase profits is to lower the cost of running your business.
The first step to a leaner business is to streamline your processes. Look for every opportunity to systematize tasks and functions.
Remember that the word system is often used as an anacronym for: Save Your-Self Time, Energy and Money ... I like to add an "s" to that word to also include "Sanity" ... and an old system that is grossly inefficient and ineffective definitely makes me insane too -- much like sitting in traffic for an hour when I know it could have only taken 15 minutes if I would have just had the foresight to take the back roads.
Ok, so you've probably already logged online to track down that new app or software to efficiently manage your billing receipts (or some other time consuming task) and before you know it moments turned into hours and maybe even days and weeks and now you're virtually drowning in solutions to your problems.
So, what's the best way to streamline work for you? I don't know the exact answer for you because I don't yet know you and your company. You know who does?
Your work force.
Thus in areas of low efficiency let your workforce loose on the problem to come up with their ideas on how to run a leaner business. After all instead of you spending that time online guessing what you need let your people carry out their own investigations and decide. A better informed solution is likely to appear.
Consider these simple methods to generate the self appointing problem solving mindset:
1. Empower your people. Share with your employees that the business is resting on their shoulders and as such they each have some personal stake in it. Perhaps a frank and honest chat about how you believe each employee can and should sit and think about the best way to their work, instead of mindlessly doing it the way they've been taught.
2. Reward their ideas. The classic motivator handed out to the initiative grabbers. Those few who either had a useful idea through sheer brilliance or those who spent their 5 minute coffee break looking up software that meant easy compiling of the invoice files for their future convenience. If one of your employees can find a way to shave the time it takes to perform a repetitive task it will help you achieve a leaner business. Even at a seemingly insignificant savings of say, 15 min multiplied on a daily basis, by the end of the year can add up to quite a substantial amount of savings.
3. Conduct regular Mastermind meetings. I find that many business owners hold a misguided belief that scheduling a staff meeting is an event where you expect yourself to do most of the talking. Consider instead to shift that completely, to creating an environment where THEY are doing most of the talking.
In a mastermind format you act much like a conductor of a great symphony orchestra. You are allowing your performers to build upon each other's ideas, opinions, insights, and even giving useful push-back. You feel like you're chasing your tail most likely because you're trying to play every instrument. You don't have to be the one to come up with all of the solutions. Remember, you're the conductor. Let each of your people perform their part.
When you keep letting them know you value their opinions, it's quite magical how they begin to contribute in a more valuable way. One of my favorite quotes was said by former Packer's coach Vince Lombardi - "treat them as champions, and they will play like champions"
Finally, I would be remiss if I didn't let you know that a 4th method is to
4. Engage outside help. What often happens in any organization is a stale "group-think" type of syndrome. Getting a fresh, outside perspective can prove invaluable to suddenly shrink down with a much leaner business. Sometimes it can be tough for you to identify what you should consider letting go of. If you've ever watched the popular tv show: HOARDERS, BURIED ALIVE, you see an exaggerated and amplified version of just how many people can hurt themselves by not being able to let go. On the show it always takes an outside expert organizer to direct the person on what things they need to let go of.
While you and your staff can certainly find ways to streamline your business processes, if you want to further tighten the system for an even leaner business, it is well worth the initial investment to engage outside expert help.
You can make your marketing process leaner by shortening the time and cost of acquisition. You can make your payroll leaner by simplifying your customer support processes. You can can also make your payroll leaner by increasing staff productivity replacing archaic, mistake-ridden methods with tools and technology that can generate better results in a fraction of the time. You could also prune back and eliminate some of your low-producing products, services and even customers. It's amazing how it can all add up to quite a size-able chunk by the end of the year.
WARNING: Your focus on having a leaner business this year does not mean you should cut out your marketing budget. Ongoing marketing is a necessity for every business to attract new clients. Revenues from new customers is equally important factor to increasing profits.
Creating a leaner business is not a one time change. It is a mindset you want to embrace throughout the year to continually evaluate opportunities to help you increase your bottom line profits.
by: Yoon Cannon
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