Take What You Have and Make It Better
Under the Universal Business Model (UBM), there are three business functions that must work well together in order to increase profits: accounting, marketing, and production. Any of these business functions that act independently from the other two can doom a company.The function we would like to focus on today is production; production is the internal workings of a business. Production is the profit center of a business, and when the profit center is running well, the entire business has profit potential.In order to improve production, and in turn improve profitability, you must look at ways of taking what you have and making it better. Here are three things you can do in order to improve your services:
Ask critical strategic questions of your employees, clients, and economic forecasters
If you’re content sitting on your haunches enjoying your current success, then you’ll never be able to increase profitability. In order to build upon your current success and improve your business, you need to question how things are currently running and how they could be improved. Many of the people you work with and for could answer a lot of key questions for you. Questions like: Where is the market headed? What types of new technology might you take advantage of? What types of synergy might you introduce to production? How could you be better, faster, and cheaper all at once? How might you improve the quality of your services and better meet your clients’ needs? If you are constantly looking to improve your business, you’ll ask and eventually answer many of these questions, improving production and profitability.
Hire people smarter than you!
If you’ve gotten to the point where you need to hire employees to increase efficiency, then you realize that you’ve grown your business beyond your own capacity. You can no longer do it all, so why not hire the best and brightest to do some of it for you? The thought may be intimidating, but the truth is your business will be better off if you can hire staff that will make a significant contribution to profitability. Be willing to partner with your employees, allowing them to contribute to your success and rewarding them when they do.
Develop products and services that will sell without having to educate clients
Your cost to market a product or service that already exists will be a fraction of the cost to market something clients don’t yet know they need. For example, all your current and potential clients will recognize the value of tax preparation services without you having to educate them. This will minimize the cost of marketing this new service to clients.The best way to determine the products and services your clients are looking for is to ask them directly what they need. If you have employees, ask them what clients are looking for. You may be surprised at the new and innovative ways you can improve your products and services.
“Take What You Have and Make it Better” is just one of 9 principles that will make your business more profitable. Allen Bostrom, president of Universal Accounting Center, has written the book In the Black: 9 Principles to Make Your Business Profitable to help small business owners like you succeed. If this one principle has helped you, order the book to read 8 more tried and true principles that you can apply immediately! For less than $20, you can take the necessary steps to build a more lucrative business today.