One of the ways to improve business profits is to practice great money management. Most of the time, companies and start up businesses overlook their everyday spending and can, for most of the time, be saving a significant amount of money if they did. These are called the ‘not critical’ aspects of the business, or certain things that can be replaced with cheaper and just as effective techniques. There are entire companies that are dedicated to this, called damage control.
The damage a business does to itself is not tightening the tap on the money tank, their employees or even their basic infrastructure seems to be spending on things that are totally unnecessary and totally inconsequential. You need to investigate every aspect of your business and how your money is being spent. Sit down with your partners and your employees and bring out the accounting sheets, tracking every dollar down. You would be shocked and surprised at the sheer amount of money that you would be saving. Some business have found that they were over spending in excess of $30, 000 a year – money that could have been used to increase the effectiveness of the management process or simply to develop the business further.
Another way to improve business profits is to diversify. Business models that are stuck in a single dimension paradigm often see profits stagnate because they are hooked on a single market and refuse to trying new things. Diversity, try new projects and even venture into riskier areas of the market. But with that comes a risk. You need to have the ideals of effective money management and a good head for seeing threats on the horizons. Taking risks have been the mantra of the most successful, look at Microsoft, or Apple or Virgin Airlines, Google etc. They have been carrying the flag of taking risks from the first time they have started and they have diversified into every aspect of the market. Think small scale and apply it to your business. That is where growth comes from and that is where your increase profit comes from – from different revenue streams that will allow you to maximise your assets and get great returns from all avenues.
The other way, and this is for the start up companies, is to get a virtual office. Starting a business is essentially starting a risk, no matter how air tight your plan is and what you need to do before committing tens of thousands of dollars to leasing a physical office and getting office equipment, is to go virtual and see how your plan works out. If your product or service has phenomenal success and the response is brilliant, then you can think about getting a base of operations. It is all about reducing the risks in your plan and cutting costs through avenues like a virtual office is a great way for you to test bed your ideas on the living market and see whether it will reap you the rewards you deserve.