Every Australian business, large or small, craves income, revenue and most importantly profit and positive cash flow. People most often say they went into business for the money and the freedom, but sometimes years later, they are missing one or the other (or both).
Here are My 12 Steps to Achieve Your Success and Improve Your Business’ Bottom Line (ie Profit)
- Be realistic about what you are offering. If it’s something which is out of date, irrelevant, not valued or obsolete, then it may be that it’s time to change. For example, a bookstore which operates only in person/physically may be encouraged to open an online store, or even move entirely online if your rent has become ridiculously high.
- Get all over your money. If you don’t understand how to read your financial reports, learn. As an experienced business coach (with financial qualifications), I am often teaching clients how to read their reports, what metrics to look at and what ratios are important. If you’re a service-based business, then very likely staff cost as a percentage of sales is a prime metric you should be reviewing.
- Put a budget in place (both for the business and personally). I know, you say, agggghhh budget, that is not fun – but what if I called it ‘planning for profit’? If that is more appealing then change the name. What we focus on, we manage better and what we manage well is usually improved. Why I say personally have a budget as well is because if you are spending more personally than the profit you’re taking home, then you will still have a shortfall.
- Debt collect every week – yes, every week. Be tight on your collection terms and ditch the 30 days from end of month and make it 7 or 14 days. But before you can do that, it means you need to be up to date with your bookkeeping and looking at your financial reports.
- Sack the clients who give you the most pain, and the least profit. I call them your D-grade clients. They complain, take up all your time, never recommend you favourably to others, and probably are the slowest to pay. They suck up your energy and your resources. You don’t have to say “you’re fired” but simply advise you’re no longer able to look after them.
- If you’re doing project-type work, charge a deposit, and invoice progress claims regularly. If you work with plans, be clear about what is included or excluded and track ‘out of scope’ very carefully.
- Spend smart. Having a subscription to something you never use is a waste of money, whether it’s $20 a month or $200 a month. When was the last time you did a comparison of your electricity supplier, both for business and privately? Yes, I know in some regions (like Far North Qld) there is only one supplier, but where you have a choice, then shop around. I can promise you that loyalty does not pay.
- Increase income by selling more, slightly increasing pricing, pricing on a value method rather than hourly and communicate your worth in your marketing. If you’re selling an item which is not profitable, review it. Does it have a purpose, such as to lead customers to a more expensive product? Why do supermarkets put the most needed item, milk, at the back? To encourage impulse buying, as you are forced to walk down aisles. Why do they put chocolate bars at the registers? Again, to encourage impulse buying.
- Savings accounts, for BAS, tax and a rainy day (or as a ‘war chest’ as one client called it recently) are critical to staying ahead. Try to automate this, and even if you need to start small, do so, rather than not doing it at all. If you have ‘bad debt’ (credit cards, for example), then pay these off ASAP. In fact, where possible, keep debt to a minimum in order to give yourself peace of mind if cash flow gets tight sometimes.
- Especially if you are a time-based business, then time is one of your greatest resources. Use this wisely. Ensure all team are kept busy and have a list of things to do if they happen to be running low on work. There is always something productive which can be done. Limit time on wasteful tasks (even setting a stopwatch if needed) and look for ways to improve how you do things. One great example I use is ‘text replacement’ on my phone, which means instead of typing out a message with two thumbs which could take 5 minutes, I’m using phrases which are preset and may only require 2 or 3 characters. Such a simple thing, which can be a game changer for time management. Where you can automate, do so, or at the very least, stop duplication and doing things the hard way.
- Partake in quality marketing. You don’t have to spend a fortune, but you do need a solid strategy and action steps to go with that plan; something I do with my coaching clients frequently. Your marketing plan should be geared towards your needs, your budget and what you are comfortable doing yourself. Even if you have a big budget and lots of money, I still hate to see waste in marketing. You should be tracking where leads are coming from, what is working or not and always looking to improve.
- Get a business coach. Yes, I know this looks like a blatant sell, but think about this: What will it cost you to make mistakes or miss opportunities? Even if you have 30+ years of experience (as I do, plus formal qualifications in Accounting, Marketing and Small Business Management), it’s always great to have someone to brainstorm with, run ideas past and give you honest, practical and effective advice. Having someone on your side to vent to, share confidential ideas and work to grow and improve, so that at the end of the day you have a business which both makes you money and gives you freedom.
If you’d like to know more about how I can help you and your business specifically, reach out to me and book in a complimentary sample coaching session. This is a half hour (usually over Zoom) where you experience my coaching directly, includes a free business analysis and helps show you how I can help. It is not a half hour of full-on selling – I promise. To learn more or book this in, CLICK HERE.
Read Is Your Brain Sabotaging Your Business.
