If you see that your profits are not as high as you want them to be, or if your profit objectives are generally unrealized, then your company needs an overhaul, one way or another. It is said that your profit margin is the single most powerful indicator of your company’s health. So, if you profit margin is dwindling, chances are, your company’s health is dwindling as well.
Here are some ways you can jack up your company’s profitability.
1. Overhaul your marketing plan.
If your profitability is on the wane, that simply means your marketing plan is no longer working as effectively and efficiently as it should. For instance, if you’ve been using the same print ad that runs in the local newspaper for several years now, people may see it as being static. That your product or service has nothing new to offer. Try new marketing angles, consider trying a new approach. Sometimes you don’t have to change the product, you just have to change the way you communicate the product to your customers.
2. Offer new products.
If your profitability has gone stale, it simply means your products have gone stale as well and are no longer doing that well in the market. In order to revitalize your business, you need to offer something new that may or may not click, but would definitely stir something up. Optionally, you can increase whatever it is you are already offering your customers by expanding your product line and by introducing new variants to existing products.
3. Expand your client base.
Expanding your customer base is a sure-fire way to increase profitability directly. For instance, if you initially contacted, say, 2,000 customers in the area when you opened your business a couple of years ago, then it must be time to add another 1,000 to 2,000 names from nearby and surrounding areas. Optionally, you may want to do telemarketing, guerilla marketing, direct marketing, advertising, or publicity, all in the pursuit of more possible customers for your product or service. Broaden your exposure to reach more customers.
4. Reduce costs
Another sure way to increase profitability is to simply reduce expenses. Money saved is money earned, so they say. There are, in turn, several ways to reduce expenses, like streamlining your workflow, reducing manpower number, and outsourcing some of your company’s tasks. Now, with regard to outsourcing, which job functions should you consider outsourcing? Some of the most common functions that are outsourced are: data entry outsourcing or encoding, call center outsourcing, customer service, technical support, legal and medical transcription, SEO content writing, and social media management.
Profitability is what every business aspires for. However, it’s not as easy as it seems to achieve that P word. If your business is in the doldrums or if you simply want a bigger bottom line, then it’s time to reinvent your business and think of new ways to shore up interest in your product or improving operational efficiency.
James is a business school graduate and an aspiring entrepreneur.