When a recession hits, as it has at the moment it is too easy to get taken up with the doom and gloom. Amazingly some of the most forward thinking and innovative companies and businesses have been set up in times of recession… and talking to successful business people the y are often told ” you will never do it”….”you want to set up a cupcake business?” ” No one wants to buy yachts at the moment, you must be mad” . And yet customers do come . They may demand better value for money or a more substantial guarantee but they can still be found… we just may need to be more creative in finding them.
Ok so off the top of my head:
what can you do to improve profitability in your business?
1) reduce your break-even quantity by reducing your fixed assets that aren’t productive.
2) offer additional products or services to your existing clients.
3) Reduce your operating costs … what can you cut out. If you categorise costs into those that are legally required to do business, those that are critical to carry out business and those that are nice to have….. What can you cut out? What can you substitute without affecting customer service.
4) offer better loyalty schemes to your existing clients, or longer guarantees to make an offer “risk free” . This seems counter intuitive but research has shown this can increase the take up twofold. Personally I have not found the additional take up as high as that.. more like an additional 10% but definitely worth having.
5) reduce the quantity provided rather than put up the price ( this happens a lot in chocolate manufacturer… has anyone else noticed the size of a mars bar is considerably smaller than it used to be?)
6) look at what other successful business are doing in different markets… is there anything there you can model?
7) What other routes to market are there that you haven’t tried and tested? This could include social media, local marketing, QR codes, mobile marketing, different forms of public relations.
In essence to improve profits you need to increase sales, or other forms of income , or change the mix of produce goods and services to the more profitable lines
or reduce costs. or come up with something completely new and innovative that supplies a need.
Do you know if you are still meeting your clients needs? If not set up a market survey – see separate post on how to do a market survey…. or watch my video on youtube where I show you how to set it up!