When the economy is booming, we can become complacent around reviewing the detail in relation to our expenditure, sales and profit as we are within budgets and we are hitting our targets.
It is often not until the economy slows down and businesses start to feel the impact that we actually take the time to look at all areas of our business to identify what is working and what is not.
There are currently many businesses looking at ways to boost their profits, so I thought I would put together the top 5 things I think you should do to achieve this:
1. Be focused and plan
You must be focused on outcomes that are going to build the path towards sustainable success for your business. Without focus you are trying to be everything to everyone and you are investing time in activities that aren’t going to add value and ultimately convert to profitable outcomes. Ensure you have a strategic plan in place and that you and your team are all clear on the bigger picture. Review and revise your business plan at least every 12 months and ensure every member of your team (including yourself) has a 90 day action plan in place with their 5 key actions listed and that they are aligned with your strategic plan.
2. Put measures in place
Having plans in place is great in theory, but if you don’t have measures in place to allow you to track your progress and success of all areas of your business, then these plans mean nothing. Make yourself and your team accountable. Track your progress by developing visuals that you can put on the wall that show your measures, your targets and the reality of where you are at. Don’t just make your KPI’s financial as this drives the wrong behaviours. It is important to add measures for all areas of your business including engagement on social media, the number of speaking engagements and thought leadership article features or client satisfaction surveys.
3. Review your business model
For most consulting businesses employment costs are by far the biggest expense, and you need to review whether or not having this fixed overhead across all areas of your business is a viable model. Are there areas of your business that you should be outsourcing? Can these roles be fulfilled locally by a contractor (for example book keeping or IT services), or are you able to find someone offshore (including admin tasks or design work). Is your current business model aligned with your strategic plan?
4. Review your expenditure
For most, this is obvious and for consultants this ties in with your employment costs as this is your greatest fixed overhead. You should also look at areas like IT software, should you be consolidating? Is there duplication? Is the software being used? Are there other ways to integrate the technology that you have in place? Are there better (and often cheaper) alternatives as technology changes so rapidly? Review your office space leases, is this competitive? Are you utilising all the space?
Review the contracts you have with your service providers, are they on par with their competition? It does pay to take the time to look at your options when contracts are up for renewal as there is no lack of competition out there who would love to have your business. Please note that I’m not saying you need to change providers, but at least you know whether your costs are on par with the market and that you are receiving a good service and value for money, because if you’re not it will make your decision really easy!
5. Invest in your clients
Make sure you continue to build relationships with your clients and deliver great outcomes and take the time to seek out other opportunities for your business they may have or know of. In most cases when you deliver great outcomes, your clients will be very open to referring you to others you may be able to assist. Your clients should be your greatest advocates, so make sure you continue to invest time in nourishing these relationships.
Even though the economy has slowed, there are many business who are absolutely thriving. This doesn’t happen by accident. These businesses continue to invest time on activities that add value and profit to their bottom line.