Small Business Owners: The Building Blocks to Increase Profits

Focus on Your Goal, Objectives, Theme but most of all Profitability The foundational building blocks of every business are Processes (procedures/policy), People (employees), Consumers and Capitals. Leaders, who support and understand each of these blocks, build their business. Those who decline or neglect these building blocks, find themselves with declines in both their top and bottom lines.

Believe it or not, organizations can sometimes forget that creating and carrying top quality products and providing excellent services is their main objective. Organizations keep useless processes in effect because it is relaxed, safe and familiar. Leaders must regularly set aside time to define and redefine their processes, track defects and poor service, and make improvements to solidify these (5) major building blocks.

Owner Mindset

You've got to make the mental shift from running your businesses as a self-employed job/good employee to structure a business you can one day sell, scale or own passively to fund your retirement.

This means reliably reminding yourself that you are just a temporary producer, and that your business must eventually replace you from its day to day operations.

 

Be Clear in Your Mission

There's a reason you started a business and left your job (or didn't try to find a new one). Why are you doing this? Keep in mind that your personal task and your company's mission can be different, as long as they're aligned and can co-exist. You did the mission statement in the business plan and it's on the bookshelf collecting dust.

Network and Get a Mentor

Get a business advisor or coach. It doesn't have to be someone professional, just someone who can share skills to bounce ideas off of and tell you when you are losing teams, money and the mindset.

Get your Business off the Road to Nowhere

When the money gets tight and the force fades, you are left with day to day work of the business, this is when you learn how to make your business run. It can become grinding because sales are slow and you are learning how the business actually operates, to acquire customers, market products, understand how changing processes and products affect your financials, and every idea you have does not automatically work as you imagine it to increase profits.

At some point while running a business, your likely to experience that burned out or uninspired feeling. Work-life balance is important; there is a truth, in working hard and playing hard to unwind. Reading a daily devotion and taking a daily 30 minute walk can assist in relaxing the mind, etc.

Customer

Customer acquisition is expensive in order to acquire new customers, companies must effectively target, market to and convince customers to try their product or service.

Many business owners do not take time to figure out who is their target customer. What are their target customers' likes, dislikes, needs and wants? Which types of media do they consume? What is the cheapest way to reach them? How much is the target customer willing to pay for their products or amenities? Where and how should we sell our products?

Remember, it is cheaper to keep a customer than it is to acquire new ones.

Master the Art of Engagement

Being engaging is important in every part of your business, whether its communicating through email marketing, social media, blogs, videos and other commercial formats

Grab social Media Attention

Social media marketing plan should include Instagram, Facebook, Twitter and the company website to communicate with your customer. Use the same theme, pictures (banner pages) and similar products.

Understand importance of Business Logos

It is the first thing potential customers will notification about your brand, make sure it is presentable, professional and refined. Make sure the Logo connects with your customer needs and wants.

Create an experience for your Brand

Create fun and informative environment to solve your customer problems

The Right Clients are more Important than the Most clients

Most business strategy is get the cash in the door by any means necessary to get most clients in the door. Problem is you achieve all of this at the expense of quality, profit and sanity. The right clients will allow your company to do better work, build a better standing, generate more profits and maintain better employees.

Don't try to be all things to all customers. Specialize in solving your 'target audience' problems and have fun doing it. Even the largest companies do their best when they focus on keeping the 'main thing the main thing'.

Operations

Processes 

Are the actions and applications that managers and teams put in place to achieve favorite results.

Leaders need to take a step back to review their processes-individually or in a cross-functional groupings--- to eliminate inefficiencies and enhance performance, annually or as the market changes.

Systems

Systems are the reliable processes and procedures that empower your business to consistently produce an excellent result for your client and profitability for you.

Documenting automated processes can increase your company's efficiency and decrease costly mistakes; the checklists your employees follow to ensure that all orders are shipped correctly; the alignment process for all new customers when you begin working together; and the standardized contracts you use with all your new employs and vendors.

Controls/Standards

Controls are the processes, procedures and safeguards that protect your company form uninformed or unsuitable decisions or actions by any team member. They also are your business's way of making sure that key work is getting done on time and the right way.

There are (4) main types of business controls:

1. Checklists/Visual Business Process Controls
2. Scorecards/ Business Performance Measurements Metrics by Function (KPI)
3. Embedded Internal Quality Controls--- product/process quality checks
4. Policy and Procedures--- written/measured

Scalable Solutions

Systems(using excel and quickbooks), Processes and Procedures that worked for a $1million dollar a year business, are not sufficient for $10 million dollar business or a $25 million dollar business.

Scaling your business involves building it in such a way that your business model and systems can be rolled out and replicated on a much bigger playing field, based on amplified product ordered/processed sales volume.

Example, choosing a database solution or a 3rd party fulfillment should be based on actual growth rates, not potential or forecasted projected sales.

Financials

Cash flow and Economic Statements are your 'life line'.

• Learn how you are making and losing money. Understand profit and loss statements and what processes and procedures link to improving the 'profits' of your business.

Resources

The company's financial wherewithal moreover, the measurement tools necessary to manage and track finances and assets. Do you have the knowledge, capabilities and skills necessary to use those tools to increase your profits?

Small and mid-size businesses must master the ability to manage their working capital and cash flow. Every company has access to profit and loss, balance sheet and cash flow statements. Management is either using accounting software or someone is preparing the reports for organization.

How well does senior management understand the company's financials and it correlation to their strategy? Do these managers understand which parts of the company need investment, where cuts can be made on why?

Managers must take the time to acquire the relationships and interdependencies between their tools and the reports they use to maximize their capitals.

Teamwork makes DreamWorks

You can't do it by yourself. It is serious to confirm that your business doesn't rely on the presence of any one individual.

Even Steve Jobs and Bill Gates, needed a great team to help them execute, deliver and do everything behind the scenes to deliver their vision to customers.

Surround yourself with the best people you can find. Hire people who are smarter than you, then step back and let them do their jobs. Remember championships are won by teams, not athletes. Employees are hired either to increase revenue or to decrease expenses in order to improve profits, no other reason.

People

People are not your greatest asset; the right people are. The wrong people are your greatest catastrophe. Mediocre people are your greatest channel on resources.

Leaders must struggle to create learning societies where the organization is always pushing to develop. A organization where employees feel valued and are donating according to their aptitudes.

Effective management will create an organization where personal growth is expected and rewarded and employees are both challenged and satisfied.

Employees who are motivated by the company's vision and mission will produce profitability, but frustrated employees will lead to losses.

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