You’ve probably heard it before, if not from your own experience, from other businesses in your space. “Oh, I would buy/invest/do X thing, but the profit margins are tight right now.” In fairness, this is a true concern, and may not necessarily stem from a fault of your own. In many cases, profit margins are a side effect of market forces outside your immediate control. Maybe you make immigration ads, and larger companies are putting on some external pressure. Perhaps you run a retail business and find that your customer base is dwindling as people move online. There are some concerns that are universal, like potential customers being dispersed among a growing sea of competitors. Here are some ways to help get more profit out of your operations, which may make the difference between success and barely staying ahead.
In some cases, certain expenses stem from inefficiency in your business process. Small costs can roll into large issues over time. For example, how are you doing with targeting potential financial waste? Stationery, travel costs, postage costs, all of these be potential areas of waste, where you don’t need to spend what you do. In general, a good way to determine areas to trim down is looking at your monthly spending versus your budget. You may be surprised how much you can save cutting down on small things rather than looking at one big thing to change.
The same applies to other parts of your product chain if it’s relevant. Manufacturing is a huge example. You may run a business with a manufacturing partner that you like. But even if you weren’t planning on switching, it may be worth it to get quotes from competitors in their niche. This lets you know what the market rates are you so can be competitive when the time comes to negotiate with your price. If you have a good relationship with your current partner, bringing this up may get you a better deal when it comes to negotiating, and you can still keep the other things about them that you still like. Saving by bulk ordering or changing your method of delivery are other common areas where you can cut down.
In many ways, this is more of a holding pattern than a concrete solution. You still need plenty of new means of profit to gain long-term success. So take a moment to ask yourself: What are competitors doing to get more profit? Is my network passing any opportunities your way? Saving is important, but you need to be thinking forward in ways that you can earn more as well.
