Company Profitability – Improving Your Profitability Post by Admin , Jul 23, 2019. Business Consultancy Are you concerned about the profitability of your company or think it is time to review your expenditure to increase your profit margins? At Mr Green Consultancy we work with companies to review their business to establish where change will result in an improve profit position. We have experience of managing and consulting with a range of businesses of all sizes across a range of industries and sectors. Regardless of what your company does, your income needs to exceed your expenses and whilst this is an easy statement to make it not always easy to achieve. To further complicate the daily running of a business is cash flow as even profitable business will fall over if they do not or cannot collect the monies owed to them. Establishing and improving profitability should be approached from a number of angles which include: - · Processes – Consider your processes in every step of your operation for first customer engagement through to the final engagement. A step by step walk through how you deliver your service and products is likely to reveal areas of improvement which when tackled will result in improved efficiency. · Service – Look at your service delivery, speak to you staff and your customers. What are they saying about your business and your service? Pay attention to feedback, be that direct or on the internet. There are a number of review forums and your company is likely to feature as leaving reviews becomes part of day to day life. You can learn a lot about your business from taking the time to listen to feedback. It may point you in the direction of elements of your business you need to change or enhance. · Marketing – What is your marketing strategy? How do you generate new business? Generating new business is one of the hardest challenges a business will face. You have as much chance as your competition to compete (subject to budget) and you need to think carefully about how you spend your marketing budget for maximum return on investment. Do not forget your own customer database. Marketing to people who have already engaged with you, assuming they are happy customers, should be your cheapest form or marketing. It is surprising how many businesses focus their efforts on winning new business and neglect their existing customers. Build a marketing strategy that works for your business and is in keeping with your budgets. Also take time to look at your competitors what are they doing and what is working for them! · Pricing – When did you last look at your prices and assess how the market has changed or moved on. It is very easy to allow time to slip by and not update or change your product or service prices. A whole range of factors will impact on pricing both positive and negative and you need to be aware of these and update your own pricing to ensure you are charging appropriate levels for your services and products. Whether you need to increase or decrease your prices, if you do not review and act you will put your business at risk or be missing out on profits that should be easy to obtain. · Processing new enquiries – How do you process new enquiries. Customers will engage with your company in a number of ways. Do you make sure that each entry point for a new customer is fully managed and what is the processes for engaging with customers, issuing quotation and follow up on them? Businesses who do not have a process in place for the most basic management of new enquiries will be losing work. Our experience shows this could be as much as 20% - 40% of potential conversion. You might be surprised at what you learn about your business by investigating how your staff manage new enquiries. · Expenditure – An obvious area to tackle is how you spend your money. As much as your business needs to review its pricing, you also need to review how you spend you money and with who. Business constantly evolves with new ways of working, new technology, new platforms for generating business etc. You need to make sure that every penny you spend is justified and make sure your internal process for managing spend is robust. It is very easy to allow a state of affairs to simply continue without challenge and expenditure to be incurred simply because it is the way you have always done it. Successful companies review regularly how they control their spend and how they spend their money. The bigger you get the more difficult it is to control and having robust procedures in place will protect your business from wastage. · Performance – You should be constantly reviewing the performance of your business and the performance of your staff. Ensure you have goals and objectives set at individual, team, office and company levels and use data to review and manage performance. An ongoing performance management programme will pay dividends in terms of understanding your business and creating a positive culture where your business addresses issues and maximises opportunities, Staff work best when they know what is expected of them and they receive regular feedback on performance, Positive or negative feedback is important to ensure you reward those people that deserve it and address non-performance and help people to perform. It does not matter how big your business is. Everyone deserve a job profile and objectives and to receive regular feedback on their performance. · Collection Process – Look at how you control collection of the monies owed to you. An error in a number of companies is to lose sight of the collection process once work has been completed and this tends to deteriorate with the bigger a company gets and the more people involved in delivering service, generating invoice and collecting money. The further away a person is from the collection of money the less it will concern them. You will (or should) have terms and conditions and you will have payment terms. Your customers will be aware of them and you should not be afraid of interacting with them to collect your money when it is due. · Technology – Take the time to understand technology in your sector. What is new and what could you use. Whether you need to develop technology yourself or other have developed it you need to be aware of what is available and how this will impact on your business. You can be rest assured that your competitors will be doing the same and new entrants always tend to come with up to date technology that may threaten your business. Technology is not always as expensive as perceived and when compared to savings that can be generated by its implementation the cost more than justifies itself. If you need a solution and you cannot find the technology out there, many business will work with you to develop solutions within your own systems to deliver enhanced performance. · Suppliers – Look at your own supplier network and assess who you are using and whether they are best of breed. Your customers expect you to be the best so why should you not expect the same from the people you are buying from and dealing with. Review the relationships you have, the service provided and the price you are paying. In much the same way as your business and industry will be changing so will theirs and it is incumbent on you to review and challenge you own service providers. You will be surprised at the savings or service improvement you can achieve through reviewing your own supply chain. This highlights some of the key areas to consider when reviewing your business. The use of a consultancy will offer to you a fresh perspective and bring knowledge to your business that you may not have. “You do not know what you do not know!” As we have the privilege of working throughout the UK with a range of businesses, we have access to a vast amounts of information that can be used to benefit your business. For a quotation on how we can work with you to improve your profitability call us on 0207 842 1825 send an online enquiry or you can email us and we will call you.