When sales and profit are down, most businesses, big and small, look for ways to cut costs. It’s a natural reaction. And while managing costs, in any economic climate, is important – you can only cut your payroll, marketing, and operations so much and still have a business.
But what if you took a different path? One that put more profit on the bottom line without cutting stuff that is essential to growth?
Get More With Less
Instead, of cutting expenses, focus on improving efficiency and productivity. Get more with less resources — time and money. Here are a few examples to demonstrate this.
First, take a look at your current sales process. If it includes quotes or estimate, include this in the review. Is it efficient and effective? Does it convert a lot of prospects into paying customers or do you waste a lot of time and money chasing opportunities that never materialize? Improvements in targeting and implementation can double (or even triple) your conversion rate. So you get more revenue while saving a lot of time and money!
Second, take a look at your billing and collection procedures. Are they efficient and effective? Are you billing customers in a timely fashion? Are bills accurate? Do you follow-up quickly when customers fail to pay or do you wait until the cash is low to start making contact? Again, improvements here will put more cash in your pocket and ultimately save you a lot of time and money.
These are just a few of the areas where profit is potentially slipping away. Cut costs when they are out of line, that just makes good sense. But don’t overlook the profit opportunities that come from system improvements in all areas of your business. Unlike cost-cutting that has limitations, improved systems and procedures offer unlimited profit potential for many small businesses.
Leverage Your Time and Money
Systems are key. Most business owners know this. They take time. But you don’t need to address every procedure to see improvements — that’s the real beauty of systems. Each one makes a difference so start with the ones that can improve revenue or sales, free up your time or increase customer satisfaction.
Not sure where to start? Then check out my Ultimate Guide to Systems and Procedures. It’s the perfect solution for small business owners who prefer the ‘do it yourself’ approach.
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