02 Aug 5 ways to improve your business profits this year
At Conrad Carlile, we want to make sure you are consistently mindful of your business goals and what it takes to achieve them. This seems like it might be obvious but we are often made aware that there are factors that business owners have not considered when it comes to maximising their profits.
As professionals who deal with financial management on a daily basis, we know that in order for your business to thrive, you need to have everything in place. This includes steady sales, keeping overheads in check, and consistent cash flow. There are several other factors, however, that businesses seem less aware of. Starting the new financial year, we think it is worth remembering the factors that will make this financial year a real success. So, to help highlight these areas, we have put together 5 strategies business owners can use to improve their bottom line this year!
Review Reports and Reflect
So many of our clients at Conrad Carlile find this constructive review crucial to making positive improvements and changes in future years. Look at last years reports and positively reflect on what can be improved. Your most sought-after product or service may have changed since last year. Your reporting should give you up to date stats on what is working the best for you. Marketing campaigns that worked in the past may not be as effective as today, so it’s important to know where your new opportunities exist. This is where accounting and business advisory firms, such as our team at Conrad Carlile, can help your business. We use our skills and expertise to break down and read between the lines of your financial reports. By dissecting this data, we are able to bring to light positive and negative aspects of your business that you may not have considered, and provide constructive feedback on areas you may be able to improve this year.
Review your payment terms, supplier agreements and accounts payable processes.
Studies have shown the longer receivables go uncollected, the less likely they are to ever be collected, either partially or in full. Day 45 is not the time to contact a client about a payment that was due on day 30. Instead, your accounting department should be calling or emailing clients the first day that payment is late. A gentle reminder is a good way to begin and usually a good way to prompt most clients to pay right away. It is also important that payment terms match your business operations. Cash flow means your business is running smoothly which is the first step to ensuring you are always on top. Brainstorming ideas on how you can improve your cash position can be very effective; don’t always presume that the way you have always carried out money collection is the right way. Often small businesses are helpless when it comes to ensuring bills are paid on time, but it shouldn’t be this way and there are actions you can take to rectify it. Bringing representatives from your financial and accounting, management, sales and other departments together to come up with a comprehensive strategy geared toward maximizing accounts receivable collections is very effective. This means it is not just in your accounting department, but company-wide. Payment plans or early payment discounts are an effective way to improve cash flow. Speak to professionals to talk through the options for tackling this issue within your business.
So often we find businesses are just happy to know that enquiries are coming through but are unaware of their quality or how many of these are converting. Without these figures, you will have no idea how you can improve! There are many ways you should be looking at these enquiries – check the analytics of your website and track how many people are visiting every day. How many of these are filling out a form? How easy is it for a web visitor to visit your website? There is also no point paying a monthly fee to generate leads through Sensis for a Yellow pages listing if none of your calls are coming from these ads. You should know what return you are getting on any yearly marketing spend. If you don’t, find out. It is important that any activity carried out is trackable. If you advertise in a paper, or on television or radio, you should ask your customers how they found out about you. You need to know what is working and what isn’t so you can cull activities that aren’t.
4. Optimise your systems and processes.
Are your systems and processes up to scratch? We often find that valuable time can be wrapped up in poor work processes. What are the pain points in your business? Are there improvements that can be made to improve efficiency in your workplace? We often find a long-standing team can result in a stagnant workforce and systems and process as a result are dated and often slow.
There are many applications that will reduce time spent doing administrative tasks at all levels of your business. For example, Salesforce, Workflow Max, Evernote, Zapier, and Google Drive are just a few systems which can be implemented across many industries and workplaces. Integrations between various software are also popular and can prove invaluable. You could save tens of thousands in wasted time over a year of staff spending more time doing tasks than necessary. It is definitely worth investing the time to learn something new and insisting your staff do the same. To ensure you can see these benefits and the ROI in management systems, hold quarterly meetings over the next year to pinpoint areas of time saved or potential new software that could remove issues for your specific business. You can even reward staff for finding and researching these pieces of software to ensure it remains one of their best interests. Be aware that some applications will not directly relate to your business, and may, as a result, end up costing time to implement. Research of the pros and cons of each area is crucial to ensure real value is felt!
5. Successful people never stop learning
As a leader of your organisation, you need to make learning a part of the culture of your business. You have no doubt been teaching your staff and colleagues what they know for the duration of time you have worked together. It is important to reach outside of the business and invest in courses not only for your employees but to enhance your own knowledge and expertise. Research has shown that ‘extracurricular’ study makes you happy, more driven, irreplaceable in the workforce and most importantly more valuable to your clients. Brisbane and its surrounding suburbs constantly have courses, seminars, training days etc which address both professional and personal development. We often come across excellent events posted by Eventbrite which allow you to search topics which you will find particularly useful. These will enable you and your staff to continuously work to improve knowledge in your service, understanding your product or service offering and for you to improve your overall business management.
We would love for you to take some inspiration from the blog and sit down and write out 3 or 4 areas where you think you can improve your businesses bottom line this financial year and send through to us at firstname.lastname@example.org. If emailing it through doesn’t appeal to you, feel free to pick up the phone and make an appointment. Either way we are keen to make this year a successful one for you and your business.