IF YOUR business is not doing what it should be doing and is spiralling out of control with debt, high operating expenses or poor sales, it is now time to adopt the principle of lean and do things differently. Why not start a new business with the one you have, before it’s too late?
Firstly, get rid of everything you don’t need: large offices, expensive cars, poor performing or excessive staff. Be brutal on the overheads and operating expenses.
Secondly, scrutinise every element of your business: the business model, business plan, sales and financial forecasts, marketing strategy and more. It’s now all about creating a brighter, less stressful view of the road ahead.
Key profit makeover tips that can be adopted today
1. Eliminate every expense you can live without
Reduce your monthly expenses to the lowest possible number. You have to be tough here as you can't build a new profit base when you are still using yesterday's expense model.
As Warren Buffet put it, 'If you buy the things you don’t need, you will soon be selling the things that you need.'
2. Be brutal on the borrowings
Growth sucks cash, so try and construct a business model that fuels your growth without the need of outside capital. And to stay focused, look at your cash position daily. You'll sleep better knowing the business can fund its own growth.
3. Keep moving and accelerate
If you want to move faster, accelerate. The core teams of the fastest moving companies interact daily, as if in constant crisis mode - driving on priorities, new ideas, daily results etc.
Formally meet once a day with your team. It's about having a total commitment to action. Push yourself to walk faster, talk faster, read faster and move faster. Constantly look for faster methods to get the same result. Send and return communications with as little delay as possible.
Whenever you think something can’t be done quickly, ask 'Why not'?'
4. Embrace the power of social media
From blogs to Twitter to LinkedIn to Facebook, invest in an online and social media presence now. Businesses that don't leverage social networking will be left behind.
Jump-start new relationships with forum building. Update all your sites. Keep your online relationships fresh and dynamic with news, blogs, newsletters, tips and surveys.
Find an online forum in your industry and become an active contributor. You will then be able to generate a club atmosphere amongst your customers that will help you grow your customer base. You can quickly build a huge following of customers willing to try your new product without spending a cent on advertising.
5. Think 'outsource'
Whatever type of skill or service you need, think hard before hiring a new employee or keeping an old employee. Look at each department or each person when you are trying to manage costs. Can you eliminate positions, combine jobs and outsource tasks? Outsource exactly what you need for the right amount of time and the right amount of money.
6. Go BIG on your BEST customers
Look at which customers are giving you the most profit. Treat them like gold. Whatever you do, just don't lose them! Keep in touch with your clients.
Instil the 'Customer is King Culture' into your business and keep your team focused on customer service. Extraordinary behaviour with your best customers will give you extraordinary top-line growth.
Offer them such a high level of service that they become natural ambassadors for the business; the investment pays off as you will expand your customer base with first-rate customers.
7. Fire your 'bad clients'
For Pete’s sake, why on earth do we want to continuously pay attention to those that merely exist on our customer base, but very seldom, if at all, support us? Sometimes, the highest-maintenance, most time-consuming customers you have are the ones who pay you the least. Analyse the profit margin or lack of profit margin that each customer produces. Stop pursuing customers who are not helping you be profitable.
8. Be the rainmaker in your business
Sales is everything! If you have an abundance of sales, cash will flow and if cash flows you can fix anything in your business. To improve cash flow problems, you must constantly network, build relationships and make it rain.
As the rainmaker in your business, you will seek out, secure and retain big clients, bring in big money, and conclude big deals. Don’t outsource this task, seize it and grow your top-line quickly. Be interested in, get to know, and understand your prospective and existing clients.
Sales is the activity of developing relationships with quantities of people which result in trust, positivity, and belief in the salesperson.
Business networking is a way for you to make the maxim, 'It's not what you know, it's who you know' work for you. There is no doubt that effective networking can be the biggest contributor to your success. It's effective and it's low cost.
9. Get mobile
With cloud technology, you are no longer bound to a desk. Log onto some new interactive cloud-based systems that can help you do your business anywhere.
Make sure you have Internet connections on all of your devices. Everything you once needed to do in your own office can now be done remotely. Best of all, when your employees are sharing files in the cloud, it makes for a much more cohesive, connected team.
* Mike Anderson is the founder and CEO of NSBC (National Small Business Chamber).