All for-profit businesses aim to increase their earnings and earn as much income as they possibly can. In their efforts to increase profits, most businesses divert all their energies to attract more customers, capture a greater market share and generate additional sales. These are all noble aims, but the key to increase bottom line, which is often forgotten by businesses of all size, is to work smarter and not harder. Profitability can also be improved by cutting down wastes, increasing productivity, controlling costs, and tightening credit ends.
We focus on how you can take the productive route to increase your bottom line. The following 5 strategies can greatly help your business:
Train Employees to Increase Productivity
Well-trained employees that are better equipped skills-wise to deal with the requirements of their day to day jobs can save their companies thousands of dollars annually.While it is true that time and money is usually required to train the employees, but once they gain more knowledge and become productive members of the work force, the return in terms of higher-quality products, increased output, happier customers and better retention rates often easily outweigh the costs involved. Training programs can help the under-achieving members of the workforce, and instill an environment of competition in the organization.Effective training programs focus on developing operational skills, improving company procedures and streamlining strategic goals.
Market Smarter, Not Harder
Being creative about marketing strategies can help achieve substantial drop in the spending and therefore increase your bottom line. Marketing smart requires paying close attention to the return on investment. Alternate but effective marketing strategies could involve focusing on decreasing the cost per customer acquisition. Existing customers can be targeted to purchase add-on goods and services offered by the company. Existing customers already have a belief in the company and therefore could be enticed without much expenditure.This approach not only works to improve customer satisfaction but also boosts sales revenue so that businesses are improving both their top and bottom line.
Control Overhead Expenses
There are almost as many companies that fall to the ground due to them not caring about the avoidable overhead costs, as there are that fail due to a sharp fall in revenue. There are several unnecessary fixed costs that can be prevented. Some of them include decreasing the office rent by sharing space with another vendor or allowing employees to telecommute.Another example that has been implemented successfully by many companies is the use of software programs that enable the automation of routine procedures such as payroll management, email marketing, and records storage.
Revise Collection Procedures
Although working capital does not directly affect the bottom line, but early availability of cash can help a business clear out its own dues, earn early bird discounts, and avoid the situations where it has to doll outextra late payment fee. Therefore, improving the cash flow cycle by implementing late fees on debtors or charging interest on unpaid invoices can also help the profitability situation.
Objective Measurement of Employee Performance
It might not be very evident how a weak employee performance measurement and evaluation system could be affecting productivity at the bottom-line, but it can actually be detrimental in many ways. It is vital to have a definitive measurement system in place rather than just a casual appraisal process. This would help to bring in salary improvements across various levels of the organization.