When business owners strategize ways to increase profits, their energy is usually focused on how they can attract more customers to generate additional sales. However, working smarter — not harder — is the key to boosting the bottom line. Improving net earnings is directly linked to controlling costs, increasing productivity, marketing resourcefully and tightening credit terms.
Strategies to Increase Your Bottom Line
Train Employees to Increase Productivity
Well-trained employees who know the scope of their jobs and are held accountable for their productivity can save companies thousands of dollars each year. The time and money invested in training employees to be savvy customer service representatives, enthusiastic brand ambassadors and productive team members are returned in higher-quality products, increased output, happier customers and better retention rates. Along with training, productivity tracking programs can identify which employees are excelling at their jobs and which under-performing employees need extra support. Strong training programs focus on developing functional skills, improving company processes and streamlining strategic goals.
Market Smarter, Not Harder
Marketing smart requires paying close attention to the return on investment (ROI).
put into advertising channels. Many marketing professionals theorize that spending $100 to make a $50 sale is worth the effort since that one customer could potentially generate long-term business. However, low-value customers rarely return because they are always on the lookout for the next best deal.
When creating strategies to increase your bottom line and satisfy marketing goals, instead of focusing on growing sales by 20 percent during the next six months, look for ways to decrease the cost per customer acquisition by 20 percent. Target existing customers by offering enticing add-on goods and services that improve the quality of the company’s main product. These high-value patrons are more likely to purchase these additional items because they already believe in the company. This approach not only strengthens customer satisfaction but also boosts sales so that businesses are improving their top and bottom line.
Control Overhead Expenses
There are a number of unnecessary costly overhead expenses that often run good companies into the ground. Decrease an office lease by sharing space with another vendor or allowing employees to telecommute. Take advantage of software programs that automate routine tasks, such as accounts payable, email marketing and data storage. Every two to three years, seek out updated quotes for insurance, printing and supplies to ensure you are receiving the best prices. Budgets should also be reviewed annually to determine if cuts can be made to overhead expenses that do not affect employee performance or product quality.
Revise Collection Procedures
Late-paying customers can create serious cash flow situations that too often lead to the demise of a business. Having multiple delinquent client accounts is a sign that a company’s credit terms are too loose. Revise the general terms by implementing late fees or charging interest on unpaid invoices. Rein in the amount of credit extended to chronic late payers by requiring partial payments before a new project begins. Offering an affordable installment plan can also encourage clients to reliably send in a check for services rendered.
Do you know any additional strategies to increase your bottom line? Share them with us in comments!
Profit Photo via Shutterstock
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