“I’ll be profitable in a month,” says everyone who starts a new business.
Only about five percent actually achieve that goal.
How do you avoid being part of this ninety-five percent?
Create a solid business plan. Make sure your company remains viable by having an effective marketing plan in place before you start turning a profit.
If there’s no market for the product or service, or consumers can’t pay for it, then making profits is nearly impossible. However, simply creating a detailed plan with good research won’t make you profitable overnight. You also have to follow through with your business plan consistently enough to sustain yourself. Business plans are only as good as the people who use them – yourself included!
If only it were that easy to make money. Profit is something you should always be striving for, but many businesses stumble–and end up floundering instead of flourishing.
How can you avoid hitting the skids? Make sure that everyone in your company, from the front line to the C-suite, is on the same page. Clear communication within a company is vital for growth and success. If members of your team don’t understand how their roles relate to one another and to the entire business, then it’s nearly impossible to achieve optimum performance and profits.
The bottom line: A solid plan is only as good as its execution–and so are you. Use these tactics for better results and bigger profits at all levels of your organization.
Sitting down and figuring out why you aren’t making the profits you should be is the first step to getting better, so let’s look at three common reasons:
1: You’re Not Selling Enough Products or Services
Telling people about your awesome products and how they can improve their lives isn’t enough; you also need to sell them on what sets you apart from all the other options out there, such as differentiating yourself with customer service or offering unique selling propositions.
Selling is an art and a science, and if you need help figuring out how you can do better at it, feel free to contact us at Contact Support-We Help You Grow!
2: You Haven’t Set Prices to Reflect Your Costs
Your costs are rising. It’s inevitable. If you aren’t increasing your prices accordingly–or charging enough the first time around–you’re going to go into debt or put yourself in a position where you’ll miss out on business opportunities. For example, setting prices too low will attract competitors eager to take market share away from you.
3: You Have Too Much Inventory
Running out of inventory is bad for many reasons; not only does it create customers, but it also means that you’ll have the overhead costs of the products that aren’t moving, such as employees, rent, and utility bills. On top of this, when you do finally get inventory in, there’s no guarantee it will sell (see reason #1).
If the three reasons outlined above seem all too familiar to you, don’t worry! There are steps you can take to avoid these issues. Start by identifying why your profits are low and then use our tips for improving business profitability. Now that you know where to start looking for issues, find out how much money is hiding in your business with free cash flow analysis!
By being more aware of what’s happening within your business–as well as knowing how to correct potential problems before they start–you can improve your profits and avoid some of the pitfalls new entrepreneurs often face. Remember: improving business profitability is not something that happens overnight, but it’s important to remember that you’re never too far gone to build back up again!