To improve your businesses long term growth and profitability you do not necessarily need to work harder. You simply have to work smarter. Below are 5 top business tips for maintaining and growing your business and your profit:
Cash is king – All successful business owners live by the phrase ‘Profit is sanity, turnover is vanity’, and in our current tough economy this statement has never been more true. A lack of cash is like a heart attack for a business. If you can’t pay your suppliers or the rent you can’t trade and the business will close down.
To be successful you must actively monitor and manage your cash flow. You need to plan for current and future expenses and ensure that you are retaining enough profit in the business to meet the costs. Businesses fail not because they are founded on bad ideas but because they simply do not have the funds to operate. Active cash management will avoid this disaster.
Focus on the areas you can control –I always recommend that clients take a long hard look at their costs and their margins. Making your business more successful is not just about increasing your turnover but also about retaining more of the turnover as profit.
Try negotiating better rates with your suppliers; remember that they need your custom. Look at ways to cut your fixed overheads, such as changing your electricity tariff etc. Shop around to could cut your overheads significantly because every £1 saved is £1 extra profit.
Market your business effectively – When the economy slows often the marketing budget is the first thing that businesses cut, yet this is precisely the time when marketing is most beneficial. Rather than reducing your marketing activity, invest in cost effective campaigns and social networking to get your name and message out to new and existing customers alike.
Where ever possible outsource – Too many business owners spend days and weeks each month dealing with administration that they could easily outsource. There is all too often a perception that as the business owner you should be a specialist in not only your business but also bookkeeping, PAYE, employment law etc. Free up your time by building a team a specialists who can deal with these areas for you so that you can concentrate on what is most important, growing your business!
Establish a strong brand identity – Once the domain of large companies, branding is being embraced by individuals and small businesses alike as a means to distinguish themselves from the competition. A good brand contains messages that can speak to multiple audiences, including both current and potential customers. A brand cannot be created overnight; it has to be planned and maintained, but, if done effectively, your bottom line will grow.
Rachel Finch is the Tax Advisory Partner at Burton Sweet Chartered Accountants and Business Advisors. She specialises in providing advice to business owners and individuals on a wide range of issues from Income Tax and Corporate Tax through to International Tax and Corporate restructuring.
To contact Burton Sweet visit their website: http://www.burton-sweet.co.uk/ or call them on: 0844 225 0750