In our past two articles, we’ve talked about how processes and people impact your bottom line. This week we’re going to talk about strategy. It will actually fit nicely in to what we’ve talked about the past two weeks because people execute strategy and there are processes required to execute it correctly. Here are 4 strategies to consider:
1) Train your people to increase productivity. The time and money invested in training your people is critical so they know the scope of their jobs and are held accountable for their productivity. The payoff, when done properly, is happier and more productive co-workers, increased output, better retention rates and happier customers. Strong training programs focus on developing functional skills, improving company processes and streamlining strategic goals.
2) Market Smarter: You’ve heard the old saying, “work harder until you can work smarter.” As your company grows market misalignment can occur as you potentially get out of touch with your clients’ actual needs. Warning signs of misalignment can be stalled sales growth, the feeling you’ve lost your competitive edge and/or tensions arise between promises made in sales, but not delivered in operations. Part of this could be getting back to basics. The larger business must market to what the entrepreneur did well with customers when the organization was smaller to boost the bottom line. To market smarter, the company needs to systematize delivery of the value proposition through improved marketing processes.
3) Control Overhead: take a time out from driving your top line and look at ways to control expenses. I’ve said in many of my prior blog articles that the most impact on profitability is found by raising prices or increasing sales volume. But, occasionally, look at your expenses to see if you have any unnecessary expenses that are costing you big time. People are your largest controllable expense. Is there any technology available to automate routine tasks? It also makes sense every couple of years to shop larger expenses, health insurance or worker’s comp, rent or other large expense on your income statement. Also, take a hard look at any expense that does affect employee performance or product quality.
4) Improve Collection Procedures: Cash flow is the life blood of any business. When’s the last time you took a hard line on late paying customers? It’s hard to do, but implementing late fees or charging interest on unpaid invoices can improve cash flow. You likely didn’t build in late payments in to the price you gave your customer. If you have a large order with a new client, there’s nothing wrong with asking for a certain amount up front with the order.
Making sure you implement these strategies in to your overall business strategy can take you a long way in improving your bottom line. Please share some of your strategies that have had significant impact on your bottom line in the comment section below.