Building long-term profitability is essential for business growth. But in order to improve profitability, business leaders need to think and to do things a little differently, so you can stand out from the competition and improve your bottom line.
But this doesn’t simply mean cutting costs and increasing turnover. By striving to make gradual and continued improvements to your people and your business, you will empower those around you to be more proactive and successful.
Here are five strategies to help you work smarter, not harder:
1. Review your Accounting Systems
Having the correct accounting software and system is very important for the efficient running of your finance function. There are many businesses that are using accounting software that is not relevant nor complimentary to their particular needs. In contrast, there are many businesses that do not realise
the capabilities of their current software, if optimised, could save them time and money.
Choose a business adviser, such as Beavis Morgan, with extensive knowledge of many of the leading accounting software packages and who understand Cloud based systems which are the future, enabling you have the information you need at your fingertips through your laptop, tablet or a smartphone app. We are available to assist with:
- Developing your accounting software – using their expertise to ensure that you are using the full capabilities of your software, therefore, saving time and money
- Finding the right accounting software – suited to the needs of your business and within your budget
- Adding sales invoice/customer statement template to your accounting software package – integrating sales ordering, invoicing and statements to your accounting software
- Developing BACS run on your accounting software – linking your software package to your business bank account to produce your BACS run
- Making use of technology developments – implementing new technology to your accounting system These include Cloud based software, Phone apps and any new products that are released by the accounting software providers
- Proving training – training your employee(s) on how to use the accounting software.
2. Outsource
The world we live in today is changing at a faster rate than at any time previously experienced, with new and exciting challenges constantly arising. You need to be out there competing in the market place, rather than being tied down with red tape and compliance issues.
All businesses are faced with many burdensome compliance issues together with the effort involved in running a finance function such as filing VAT returns, invoicing, paying creditors, producing management accounts for your bankers, finding the right staff, and so on. This, coupled with increased legislation, the minefield of compliance, and the associated costs with employing staff can be a strain on resources.
So why not outsource this side of your business to our experienced team at Beavis Morgan who will deal with these tasks on a daily basis. We provide a bespoke service, from incorporating and registering a start-up business, right up to providing internal financial controllers. By outsourcing part or all or your finance function to us you will not only save time, but also money spent on trying to find the right staff, paying for expensive software and training, and not having to arrange cover for holidays and sickness. You will also have the benefit of knowing that your finance function is in safe hands.
3. Transform your star team members into head coaches
Every SME business owner needs to recognise that success depends on the key strengths of its employees, so it is essential that those appointed to leadership roles have what it takes. A great leader works with star performers to ensure they develop the skills to transition to being more of a ‘head coach’ rather than just a manager, providing the guidance and mentoring required to achieve high performance, and giving you more time to focus on achieving your business ambitions. Click here for tips on how to create future leaders.
4. Apply the Pareto Principle
While people often quote that 80 per cent of new business comes from 20 per cent of marketing expenditure or that 80 per cent of a firm’s profits derive from just 20 per cent of its customers, how many use this wisdom to nurture the most profitable customers and focus their attentions on securing more quality customers?
The Pareto principle, or the ‘80/20 rule’ as it’s more commonly known, is a useful tool to help you prioritise and manage your work and your customers.
Do a thorough review of your customer list, determining which is grade A and which is grade E. The criteria should be set according to the characteristics of your business, and can be financial or non-financial. If possible, your operating system could be programmed to run a report categorising each client based on the criteria you have set.
Once you have this list, work hard to understand the attributes of the 20 per cent of your customers that make up the majority of your revenues and invest your prospecting time on identifying and qualifying similar customers.
For example, a little more investment of time with a client that, let’s say, is categorised as a C client on an A to E grading system may well move them up the chain to become a B or even an A client and ensure that your time with them is spent more productively and effectively.
Important: Don’t however neglect your smaller revenue customers. There may be gems in your ‘less significant’ 80 per cent which could have great aspirations, with big developments in the pipeline. They could also be powerful advocates and allies as you seek referrals.
5. Implement better time management techniques
Don’t be so reactive. Time management is essential to the success of every business. Focus on priorities instead of reacting to every immediate stimulus. Reduce the number of distractions. Respect your time and encourage others to do so. Organise meetings early in the day to avoid the wasted time which often leads up to a meeting – and keep your meetings short and to the point.
Plan what needs to be done before doing it, and consider this quote by Sol Tanguay (Imarklab): “Separate thinking and execution to execute faster and think better.”
Improving productivity is an ongoing activity and a win-win process. For further information about how we can help you and your SME business achieve your goals and ambitions, contact Steve Govey or your usual Beavis Morgan Partner.