I am closing down my company because we are not making profits -a friend told me a few months ago. She went ahead and informed me that she wants to venture into something else. Even if you venture into something else, unless you figure out what it is that you were not doing right, then even the new business will be a waste of time, I told her. Revenues minus expenses equal profit--sounds simple. Millions of business owners, however, will tell you it’s not. So how can you make your company or business venture profitable? Through research I had to find what actually make a business profitable, just so that few people who are giving up on their businesses can follow and start realizing their profits however how small. Create a strategy that focuses on slow, incremental growth. Today’s society has business values a bit skewed. We think that more equals meaning. This doesn’t quite work out, when actually giving something that has true meaning is what makes it equal more! What does that mean for your business? Don’t fall into the trap of competing with others based on size and gross earnings or sales, a mistake done by many business owners wanting to compete with companies with are far ahead. None of those numbers matter until you subtract what it cost to create them, and if you’re scaling things for size, the numbers will catch up to you eventually, no matter what you do. Keeping your growth slow will keep your costs down and allow you to increase your cash value. Cash value directly equates to better loans and better interests rates on the money you’ll need to finance your business. Why not start with a lemonade stand and work your way up to the big “house of lemons” retail store, instead of opening the house of lemons with loans that will eat your profits and force you to close done business before the end of six months that you have been in business. Hire only the people you need and develop them into great assets for your business. One of the most expensive direct costs to your business is labour. Sick employees don’t produce. Unhappy employees are 100 percent more likely to move slow, be dishonest and not work toward anything but their own gain. Likewise, while you are managing disgruntled employees, you’re not out enhancing customer service or turning new business. Keep few necessary employees pay them well and take care of their needs so that you yield results from your business. Don’t cut corners when you get started. This doesn’t mean spending money when you start--it means setting up your business legally and financially in the right way. Fines, fees, fixing things later, and faulty books at the start will bite into your business bottom line by year three. It is the number one reason most businesses fail within that time. Negotiate relationships with your suppliers. If you’re just a name on the Vendor list, you’ll be stuck in buying things that might not work to your best advantage. Make sure your suppliers are involved in getting you the best long-term strategy that will make your purchases perform for the profits you need. Make sure you stay focused on what you do. Don’t get off track. If you want to make the best cakes in the world, then don’t get sidetracked by making the ingredients to work with the cakes only! Let your competition and other businesses run to tack their products onto your core concern and sell them your recipes! Staying focused on your business core, the vital part of what you provide or produce, will help manage what’s important and keep profits focused and rolling in. Finally, produce and deliver only the best to your clients and remember that all profits eventually get tied to giving something back. If you want to increase your profits and watch your business grow make sure you and your company deserve the investment of time and patronage by your community! There are thousands of sayings, philosophies and religions built on the principle of giving--they can’t all be wrong! Give something back, and your community will be helping profits land at your door. Ends
