A recent article on BizBest.com advises small business owners that there’s a “new normal” in the marketplace and that they best address it if they want to survive and thrive.
Business makeover specialist Patricia Sigmon, president of LPS Consulting, is quoted in the article. She says all aspects of your business should be up for revision, including your mission statement, business and marketing plans, budget, sales and expense expectations.
Sigmon provides seven suggestions for giving your business a profit makeover, summarized here:
- “Fire” unprofitable customers. You know the ones: the high maintenance folks that require a disproportionate amount of your time and pay you the least. Start off the new year by analyzing the profit margin (or lack thereof) that each customer produces. If they’re not profitable, stop pursuing them and concentrate on those who are.
- Reward your best customers. Work off the profit margin analysis you just completed and create a list of customers who profit you the most. “Coddle them, woo them, don’t lose them!” Sigmon advises. “Offer them frequent buyer rewards. Send them a small gift at their one-year anniversary. Give them a random call every few months to ‘check in’, thank them, and ask what else they might need. Treat them like gold.”
- Start relationships by turning all one-time sales efforts into relationship sales. Some examples of where to begin with customers include instituting monthly maintenance plans, suggesting auxiliary services, selling complementary products or offering retainer plans covering a specific number of labor hours.
- Erase those expense lines. The idea is to reduce your operating expense budget to the lowest possible number because you can’t build a new profit base on last year’s expense model. It may mean closing an office or cutting back on little luxuries — so be it! Review your expenses line by line with an eagle eye towards savings.
- Outsource more instead of hiring a new employee or retaining an existing one as part of your new cost management program. Take a hard look at each department and/or staff member within your organization. Can any be eliminated (perhaps through attrition) or scaled back? Some options to consider are combining jobs, deleting processes and outsourcing certain tasks.
- Update your networking, especially online and in social media, to better compete in the digital world. “Businesses that don’t leverage social networking will be left behind,” says Sigmon. “Jump-start new relationships in 2013 with a burst of social media activity. Update all your social sites and accounts. Keep your online relationships fresh and dynamic with news, blogs, newsletters, tips, and surveys. Find an online forum in your industry and become an active contributor.”
Take your office with you. Cloud technology means you’re no longer deskbound in one location. Interactive cloud-based systems enable you to do your business wherever and whenever it suits you — just make sure that you have Internet connections on all of your devices! Encourage your employees to share files in the secure cloud for a more connected and cohesive team.
About the Author:
Beth Longware Duff is a professional editor and award-winning writer whose work on a wide variety of topics has been published in print and electronic media. She currently writes on a wide range of topics dealing with electronic payment processing and small business merchant services for Merchant Express.