Article by Mike Anderson (NSBC Founder & CEO)
As 2024 is closing in on us, now is the perfect time to ‘sharpen the pencil’. If your business is not doing what it should be doing and is spiralling out of control with debt, expenses, poor sales, it is now time to adopt the principle of lean and do things differently.
I like to call it “the washing machine effect” – Stick your business into the washing machine and clean it thoroughly; your strategic plan, forecasts, systems, sales, staff etc. Start a new business with the one you have, before it’s too late.
Get rid of everything you don’t need, large offices, expensive cars, poor performing or unwanted staff. Be brutal on the money. This exercise alone will bring relief and a refreshing approach.
Everything you do should be subject to scrutiny and revision, including your vision, business and marketing plans, budget, sales and expense expectations and more. It’s now all about creating a brighter, less stressful view of the road ahead.
Here are a few suggestions for giving your business a profit makeover:
Reward your best customers
Look at which customers are giving you the most profit, and coddle them, woo them, don’t lose them! 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.
“Fire” unprofitable customers
Sometimes, the highest-maintenance, most time-consuming customers you have are the ones who pay you the least. Analyse the profit margin or lack of profit margin that each customer or perhaps customer segment produces. Stop pursuing customers who are not helping you be profitable – period.
This coming year, it’s time to overhaul your sales behaviour. Turn all one-time sales efforts into relationship sales. Secure relationships as opposed to a sale.
Erase those expense lines
Reduce your operating expense budget to the lowest possible number. If that means selling your car or closing an office, so be it. You can’t build a new profit base when you are still using yesterday’s expense model. Go through your expenses line by line and get rid of everything you can live without.
Outsource, outsource, outsource
Whatever type of skill or service you need, think hard before hiring a new employee or keeping an old employee. Look at each department or each person when you are trying to manage costs. Can you eliminate positions (perhaps through attrition), combine jobs, delete processes, and outsource tasks? Outsource exactly what you need for the right amount of time and the right amount of money.
Update your networking
From blogs to Twitter to LinkedIn to Facebook, invest in the online and social media presence you need to compete now. Businesses that don’t leverage social networking will be left behind. Jump start new relationships with forum building. Update all your sites. 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
With cloud technology, you are no longer bound to a desk. Log onto some new interactive cloud-based systems that can help you do your business anywhere. Make sure you have Internet connections on all of your devices. Everything you once needed to do in your own office can now be done remotely. Best of all, when your employees are sharing files in the cloud, it makes for a much more cohesive, connected team.