In our business experience, we have discovered three (3)
principles that can help you channel your efforts to boost your
profits:
1. It can be Very tough to find new customers;
2. Your Existing customers are your Best prospects for new/more
business; and
3. There are only so many hours in a day, so you have to organize
your time and focus your energy to be most productive and
capture the best/highest potential opportunities.
Implement these 14 Action Steps in Your Business to Boost your
Profits:
1. Raise Your Rates/Prices
Price often implies a certain image and quality level. Don't you
offer quality? Excellent value for the dollar? As the price of
necessities such as food and clothing are rising, when was the
last time you raised your prices? Presumably the value of your
products and services has increased over the time period, so...
When you raise your rates, you will earn more for your efforts--
more money, same time, same effort and same investment. Some of
your customers will complain. Be sure you present the value you
provide. And, those customers who leave, well good luck to them.
2. Dismiss Your Worst—Least Productive—Employees
As corny as this may sound, happy people are more productive. And
those employees who don't mesh well with your culture, your
mission or your team are probably reducing the overall
effectiveness of your organization.
Give them a severance package, or write them up and give them
three (3) or six (6) months notice to turn around or find a new
[more suitable] position. Be alert for negative reaction and a
lame duck situation (for example, people who you put on probation
and who wait for their termination notice and negatively impact
productivity and employee morale).
Offer the empty seat to a go-getter Immediately. You are likely
to find several volunteers within your organization. We have
found that when non-performers, dissenters, and complainers exit,
the remaining team members will feel much better and become much
more productive.
3. Terminate Your Worst Customers, Clients, etc.
Analyze all of your accounts for profitability. 'Worst' could
mean least profitable or those who complain the most, demand the
most and delay payment. Contact those who you want to increase
their business with you. Give them a timeframe and an opportunity
to increase their business volume with you, and follow up. If
they give you more business, great; if not, Exit.
We recently helped one of our clients do this. Our team analyzed
all their accounts and their business (cost structure). We
determined that the company spends approximately $45,000 per
client every year to administer, maintain, and service each
account. We set the minimum annual revenue for each account at a
dollar value that's approximately two times (2x) cost.
Then we organized the sales force to call on 48 low volume and
dormant accounts. They grew some accounts, decided to reassess
some accounts six (6) months later and terminated nine accounts.
These steps increased their profitability and productivity,
immediately.
4. Charge and Collect Work Fees and Retainers
Work fees and retainers are up-front (advances) deposits for work
to be performed. These fees are useful to cover your overhead.
Equally important an advance gains a buy-in and a commitment from
the client. In some industries these fees are customary. Retainer
agreements should be in writing signed by the customer or client
to avoid confusion and a possible attempt to get a refund. Make
your Work Fees and Retainers non-refundable.
>>>> The key is when a customer pays the work fee, he/she
signals a serious commitment to undertake and complete the
project. In our experience, those customers who refuse to pay
work fees are often the people who are cost likely to walk
away from a deal or project in the middle and leave you
holding the bag...
5. Charge Work Fees for Customization
By the way, we now collect deposits for customization work. For
example, when we customize our best selling premium '157 Ways to
Cut Your Grocery Bill.' Unfortunately, some years back, we
customized the publication for a new customer, obtained customer
sign off on the proof, and printed the copies. They changed their
mind or had financial difficulties, and we got stuck paying the
balance of the print bill. No More. As a caveat, it is better to
reject a job and than take the job, not get paid, waste your time
and lose money.
6. Request Referrals
Ask your most satisfied (best) customers to recommend you to
their colleagues, vendors, suppliers, customers, etc. Request
names and contact points. Follow up.
>>>> For example, "Joe at XYZ Services encouraged me to call
you because he thought you might benefit from our services.
He has been working with us for over five years."
7. Run a Special Promotion or Two
If you are a Small Business Advisor [newsletter] subscriber or a
Publishing Gold e-zine member, you know that we make offers and
run promotions on our products and services in the news-letter.
Every time we do this, we generate new business. Why not give
these techniques a try in your business?
- Study the publications [trade mags, newsletters, etc.] in your
field over several months. Which advertisers run ads and promos
again and again? This means their ads must be working (unless the
publication requires advertisers to purchase a series of
insertions). If your product meshes with the readership, craft a
promotion and test it.
8. Liquidate Your Old Inventory Now
Hey, we all make mistakes. Last year's hot red dress may be this
year's iced-cold rag. So it goes.
Your old inventory is not getting any better or more attractive.
What's more, inventory takes up warehouse space, requires
insurance, administrative time, and mind space.
* Cut your losses, and Liquidate the stuff [aging inventory]
ASAP.
* Offer the old stuff at a reduced price to your customers
who make another purchase.
* Sell the dead weight at auction or to a liquidator or
wholesaler.
* Donate the unwanted items to a worthy charity.
9. Charge for Out-of-Pocket Costs and Expenses
Many service businesses charge for photocopies, long distance
telephone charges, Overnight deliveries, fax charges, postage,
meals for late work, travel and lodging costs and expenses, etc.
- You may be able to add these charges to your roster of fees and
expenses. Some companies even add a 10% surcharge to the out-of-
pocket costs and expenses. Collecting this money can
significantly increase your bottom line.
10. Collect Your Accounts Receivable
Many customers will gladly sit tight and stretch out the time it
takes to pay you, when you let them. While collection is an art
and you don't want to lose customers, every day you don't collect
money costs you money in terms of working capital. Keep track of
your accounts receivable and push your customers to pay their
bills on time.
11. Organize - Analyze What's Working / What's Not
We all get tunnel vision from time to time and often keep doing
what we've been doing. Maybe it's habit, maybe life becomes
comfortable. Step back. Take a look at what's working, what's
profitable, what's not working, what's costing you money, and how
you can improve. Get buy-in and develop an implementation plan.
12. Hold a 'Focus Group' and/or Conduct a Survey
Organize a focus group, or maybe two sessions; include your best
customers and your least satisfied customers. Offer a prize or
bonus to encourage participation. Ask them why they like doing
business with you and why they don't. Ask what you can do to
improve...
13. Read Your Customer Feedback / Letters / Complaint Forms
This material is a veritable goldmine for you and your
organization. What better way to improve than to learn what your
customers dislike about your products, service, etc.? Answer
every last piece of correspondence, and re-tool your programs.
You'll be amazed at the positive results.
While it can be Very difficult to land new customers, your
existing customer base provides a goldmine of new opportunities
and profits. Wield the pick axe today!
14. Upsell Vigorously
* Upsell means to increase the order size or the purchase
frequency.
* To discover more unbeatable upselling techniques and
strategies, obtain Publishing Gold's special report:
'Unbeatable Upselling Techniques.'
[Send US $10.00, per copy, postpaid, to PublishingGold.com,
Inc., PO Box 758, Armonk, NY 10504-0758 USA. International
members please add additional $4.00 for extra postage.]
To unlock the profit-making opportunities that are hidden in your
business and implement the strategies and ideas featured in this
special report, e-mail Joseph Gelb at Joe@SmallBusinessAdvice.com
|
