Are you ready to set-up 2020 for bigger profits, greater efficiencies and better performance? Then you’re in the right place. From simple tips for financial management to firing bad customers, from investing in good tools to creating an attention-grabbing website, Paul Henshall, CEO at ActionCOACH, shares the top 10 resolutions that every small business owner should consider to help make their businesses become more profitable this year.
1. Get a grip on the financials
Before you can start looking at increasing your profits, you must have clarity on where you stand. How much are you making in revenue and how much is going out in terms of expenses? You need a picture of the true costs of running your business. Put systems in place to track expenses, income and even where time is spent. Once these systems are in place, keep monitoring them so that you are able to quickly identify when things are out of balance. In short, profitability is the relation between revenue and expenses.
2. Stop wasting
Make the resolution to stop wasting time and energy on low value activities, products and services. Identify where you are spending most of your time, and then stop doing or delegate the activities, products and services that are time wasters, energy zappers and not profitable for you or your business. Consider 2020 the year where you prioritise your time and energy to work on your business not in it.
3. Ditch bad customers
Having the right customers is more important than having many customers. Determine which customers are raving fans and focus on providing them with the best service you can give them. Don’t try to service too many customers in order to generate revenue especially if it means straying from your core business, overextending your resources and putting in more effort than would be required if the customer was a good fit to begin with. If there are customers that are always late with payment or don’t pay at all, cut them loose. These types of customers end up costing your business more than what you actually generate profit off them.
4. Refine the customer experience
Optimise your customers’ experience by improving communication with them, making it easy for people to source and pay for your products and services, getting to know your customers better and personalising their interactions with you and your business. The customer experience is what will differentiate you from another business with the same or similar offerings.
5. Invest in the tools you need
If there is a piece of equipment or technology you have been meaning to get to make your work easier, get it now. Stop trying to get by with old, substandard or inefficient equipment because it is probably costing you more time and money than it would if you invested in proper tools. Perhaps it is an accounting system to streamline your financials, an extra delivery vehicle, a better payment processing system or a time management tool to keep track of your team’s progress on projects. If it can help to improve efficiencies, it could help to increase your profitability in the long term.
6. Put up your prices
Once you understand the true costs of delivering a product or service, you might find that your prices are too low. Do some market research to find out what other companies in your field are charging. If your products or services are of a good quality and you are delivering a great service, you should be able to easily increase your prices by 10 per cent without alienating good customers.
7. Cut costs
Identify what your big costs are and investigate ways of reducing them. Could you save on monthly costs by reducing electricity usage, or getting rid of service providers or vendors that aren’t necessary to your business. Consider all the different ways you could reduce your costs to eliminate and prevent unnecessary waste in your business.
8. Market your company
To attract new customers, you need to be marketing your business consistently. Make sure your website is attention grabbing, easy to read and simple to navigate. Also use social media, advertise online and have your business listed on networking sites – today’s consumer typically goes to the internet first when searching for something they need. You have to be there.
9. Meet regularly
Host regular meetings with your team. These meetings can be daily or weekly. Planning is critical for nurturing a growing business. Everyone should be on the same page, understand the business goals and know what needs to be done to achieve them.
10. Get a mentor and up-skill
Resolve to invest in your own personal development and education. The more you know, the more you grow and the more profitable you will be. Self educate by reading, listening to audios or watching videos. You can also attend workshops and training sessions. Find a mentor for objectivity and guidance. Consider working with a business coach to better understand your market, your industry and your potential customers in order to make informed decisions about your business in 2020.