Foundations for building a successful business

Photo credit: freedigitalphotos.net

Photo credit: freedigitalphotos.net

Gone are the days when building a successful business requires hard work. These days successful businesses are anchored on smart work; big or small businesses are now on equal footing. While having a good entrepreneurial background or sufficient funding count, what makes a business successful is the growing number of customers buying on a consistent basis and not the eloquence of its operations. In that sense, it is very important to continually focus on gaining new customers and keeping existing ones.

The principle of business success is exact just like a scientific formula: the business must be built on a strong foundation, rock of “competitive advantage”; and this competitive advantage must be fuelled by being a sought-after solution to an existing problem in the market. Once this has been established then you move on to do the right things that will surely help your business grow.

Don’t stop looking for new customers

The profitability of a business is channelled through customer purchases; take them away in the equation and the business is bound to fail. Once you have your customers you must do everything to engage them in your business: upsell, cross sell, keep them interested to refer other customers with you and continue to create relevant products and services for their use.

Keep highly profitable customers

Most businesses fail in determining the lifetime profitability of their customers that is why they often don’t mind losing them in the process. By knowing the value of a customer’s repeat business over a lifetime will give you better appreciation of them.

Maintain a unique comparative market advantage

Whether that means offering the same kind of product or service at less price or unique market promotions, be bold enough to stand out from the noise created by your competitors. Let your business’ uniqueness speak for itself.

By |8:38 am|Business Operation|Comments Off

More Profits from Efficiency in Business

More Profits from Efficiency in Business

Photo by nokhoog_buchachon | freedigitalphotos.net

More profits can come from efficiency in running a business. It is one of the pillars in building and sustaining a profitable company.

Managing Expenses means More Profits

It is important to know how money is being spent in the organization. Money can go down the drain in the form of wastage, including the waste of time of employees. Advertising and marketing are areas where money can be more carefully spent. Advertising and promotional gimmicks should be tested first on a sample of the market before rolling these out to the whole target market.

Direct response ads where you can measure the response rate of the market are preferable to the traditional image or institutional ads.

In general, corporations must carefully review how their money will be spent and whether and how much more profits these will generate, before releasing the money.

Increasing Profit Margins

Profit margin can be defined as the difference between the cost of producing a product or rendering a service versus the price at which the customer buys it, and after deducting sales, processing, delivery and other costs.

The greater number of unnecessary steps from generating the product or service to delivering it to the customer, the greater waste there is, and consequently the lesser the profit margin.

The company thus should be on the lookout to reduce, cut or totally not allow an expense whenever possible and within reason.

Taking Control of Time

Everyone has the same amount of time, and this time allocation cannot be increased by whatever means. Given this, it is critical that you are able to focus on the tasks that will give you more profits and the desired output.

You can do this by delegation, which also allows the people below you to learn to manage greater and more critical responsibilities.

Increasing your company’s competitiveness through your employees

Try calling the trunk line of a company to see how your call will be handled. The recipient of your call can either handle your call professionally or be at a loss in doing his job.  It is not easy to let go of staff that are unable or will not do their jobs well.

Thus hiring the right people and training them are critical to ensure your employees perform at their best level. This puts the company in a position where it gets the best value for the salaries that it pays and more profits.

Keeping your staff updated on new developments, products, methods of doing things will make them more competent and confident. They will then be more effective in dealing with your customers and doing their job overall. This, in turn, generates more business from customers who are satisfied.

Building Teamwork

It takes people working together in the form of a team to run a business and get more profits. No department or unit can run independently without the support of the others.

As a leader, your role is to get your people to work on solving problems, and in general making your company more responsive to the needs of your customers. Try holding regular meetings which consists of not just handing out information, but getting everybody to give their inputs to improve the business. You can invite a representative from each department, not necessarily the head of that department to brainstorm.

During brainstorming, encourage everyone to put their ideas on the table without the fear of having these shot down without a careful evaluation. After every idea is out, then go through each with the group and see which one can best solve the problem or contribute the greatest to more profits and improving the business.

By |8:04 am|Business Operation|Comments Off