In today’s episode I’m covering 11 strategies to increase your profit and take home.
It is the 21st century and there are loads of advances in technology, which means that everyone working for your business does not need to be in the same physical location as each other. Meetings with clients can be handled virtually via Zoom, GoToMeeting or many other systems that exist. Internal communication tools like Slack are awesome. Documents and notes can be shared in Google Drive, Dropbox, Evernote. It really is easy to let your employees work from home. Everyone in my business works remotely. We do not have a big central office where everyone comes into every day. And more often than not, your clients and customers won’t care where you and your team are physically based. That can just be a worry in your head.
Over staffing or having over qualified staff in roles. I have spoken about this in episode 12 where I speak about the 25% rule or four X, where each staff member should be generating you four times their salary. What that means is that every staff member should be able to in some way impact the bottom line in your business, whether it be operations staff getting referrals, whether it be accountancy team saving you money on tax and maximising cash, whatever that might be staff members should be able to have a bottom line positive impact. If they are not, then their roles need to be examined. And if their roles can be tweaked so that they have a bottom line positive impact, then there needs to be a question about why they are there.
Non-measurable marketing, advertising and PR.
Don’t believe those people that say that you have to spend money to make money. It is simply not true because so many business owners are taking up advertising opportunities because the salesperson comes knocking virtually or otherwise not because they are fully examined what the return on investment from a particular piece will be. Be savvy about your advertising and marketing spend. Make sure that you are going to get a return. Make sure you can measure that and track it to make sure that you are making the correct decision on continuing marketing, advertising and PR or discontinuing it.
Advertising before knowing key facts.
Entrepreneurs often spend money on marketing before they can answer the most important question. Why should a prospective customer buy my product or service rather than my competitors? And two, how do I reach the segment of my market that would be interested in what I have to offer? I see this as a problem not just for startups, but I see this in seven figure business owners launching new revenue streams as well. So make sure you really understand before you start putting paid ad spend against things.
Running pay-per-click or Facebook ads without actually ever having studied how to do it.
You will waste money if you don’t understand the nuances of the platform you are paying to play on. Make sure you are clear on what those are before you start chucking money their way.
Technology and tools without being really clear on the strategy you want to employ.
I urge you to do a tech evaluation in your business. Have a look. Do you have any duplicate pieces of technology? Do you have three social media management tools? What do you have in your business and do they align with the strategy that you have for your business overall and for each area of your business; marketing, sales, delivery, et cetera? Making sure that the tech aligns with the strategy is really key.
Expenses that are neither necessary to keep the lights on nor give a positive return.
I speak about this more in depth in episode six where I discuss that our expenses in our business should either be one, necessary to keep the lights on or two, giving you a positive return. And if they are neither, then what is the purpose of them? So if you have not listened to episode six, I really encourage you, once you finish this episode of course, to go back and listen to episode six of the podcast to get some more ideas about how to do that analysis on your business.
Buying courses when you have no time to implement and you are actually buying because of FOMO, fear of missing out.
Again, I see this all the time; course junkies. A lot of my clients are course junkies and I have to say I used to be there too. But please don’t buy another course if you have no time whatsoever to implement and you’re just worried because they only open the doors once a year. That is not a good reason to spend money on something because if you have no time to implement and you don’t put a plan in place to implement, then you’ll never have time to implement it and therefore it is a complete waste of money and eroding your profit and meaning you take home less money.
Now unfortunately, I see this in new clients that come to me way too often. The previous accountant is unable to give them any commercial advice, any commercial savvy around their business and how to operate it and how to operate the business strategically, how to operate the finances strategically and how to manage cash in their business. Make sure that you are not in that place because that does not help drive your business forward and it does not help you get more profit.
How much are you spending on food and coffee from your business each month? I have a few clients where when we evaluated the amount they were spending in Starbucks each month, they nearly cried. Now it may sound like small amounts, but two coffees a day, five days a week, four weeks a month, it all adds up. So perhaps give a rethink on just how much of those types of expenditure you are making. It might just have a nice effect on your dividends.
Promoting multiple streams of revenue in your business at the same time.
My rule of thumb is that a revenue stream needs to reach 100K a year before you introduce a second. And the first and second streams should be generating 100K each a year until you introduce the third and so on. If you start introducing multiple revenue streams below that 100K year level minimum, you end up running into issues and you end up not reaching the potential of any one revenue stream.
Phew, I ran through those incredibly fast, but I hope this episode has been useful in giving you at least one or two key takeaways to consider to increase your profit and take home.
Thank you so much for listening. Until next time, let’s find the clarity in your numbers, increase your wealth and get more money in your pockets.