17 ways to increase profits by 50%+, the first few

In discussion with friends at the pub, I asked one how his business was going. His complaint was that he had too much work! Not the usual response, but a recent change in legislation seemed to have really helped his business.

In answer to his dilemma my response was “If you don’t want to take on staff why not increase prices? That way you will lose some business but what is left will deliver more profit”  This is a perfectly viable strategy in his business, but may not suit everyone. He offers  a service that consumer clients only buy once, therefore a price rise should not trigger a response, as long as the new price is not wildly out of line with the market price. His repeat business to business clients can be dealt with differently as the route to that market is generally different.

This discussion reminded me of a presentation on increasing profits I gave some time ago, and this series of blogs is a dusted down version. No magic wand, just things to think about and try, and particularly relevant in the current climate where the profitability of many businesses needs a boost.

While I remember I will make the point about trialling. If you see something that you think might work, first try it on a small-scale and see how it works. Then, if it works, gradually roll it out. That way the risk of unforeseen consequences is reduced and success is  more likely.

First a point about growing sales. I will return to this later in the series but while  growing sales is very important, equally important is controlling costs since every £1 saved goes straight to the profit line, while only a small proportion of £1 of extra sales is profit. The current recession was preceded by 10 years when business life was relatively easy, and as a result people seem to have lost sight of cost control as a profit generator. I can’t understand this, because if I am making good profits, surely I would want better profits? “Simples” as the Meerkat says. Or maybe not, it’s all about getting too comfortable. Well the current situation has sure changed that for most businesses.

The next point is about action. If you read this and don’t take action when you see something to use in your business, what will happen? Nothing, that’s one thing I can be certain of, in fact I can guarantee it! You may have gained a little knowledge, and hopefully enjoyed the read, but knowledge is only powerful when used.

The final point in this first instalment is to exhort you to put aside time to plan. A well thought through strategic plan will identify a clear route to your business goals and set out action plans (that word ACTION again) to move you forward and if you take action on this one point alone your 50% profit improvement should be assured. Why do I say that well it comes from a survey by Shell LiveWire which showed that on average a business that undertook a regular planning exercise produced profits 50% greater than those that didn’t.

If you are still not convinced and don’t think strategic planning is for you, have a look at my earlier post under strategic planning, or have a look at a testimonial from a strategic planning client at http://ucs-success.com/testimonials.aspx, and of course I would be happy to help you to develop a plan. Just e-mail me at trevor@uniqueconsulting.co.uk.

The next few ways in the series “how to increase profits by 50% plus” will follow over the next week or two. Hopefully among the topics covered there will be things you can apply to your business to make it more profitable but remember in the end it all comes down to taking action.

Tags: Business, Business Advice, Business Basics, Business Success, Business Support, cost control, Cost Saving, Efficiency, Implementing ideas, IT'S YOUR MONEY, Management, Owner Managed, Profit, Small Business, SME, Strategic Planning, Strategy