If you have hopes and dreams of increasing the business activity and its profitability, you are not alone. Many people are interested in turning a small business into a big and successful business. They constantly ask themselves how to start bringing sublime ideas to the ground of reality. It is easy to throw answers into the air and escape to the imagination. The reality is you must think methodically. The blossoming of a business, like a tree with a top that bears beautiful fruit, should be based on deep roots. It needs a stable trunk that can support change, success and prosperity.
In order to do this it is important to get professional help. The right way is to use a skilled business consultant who has already accompanied many businesses. They can assist you in the growth stages and assist you with finding opportunities. This way you can vastly increase activity and profitability. It is important for the consultant to have in-depth experience and knowledge in the specific market of the business.
Firstly you must know the areas of activity to which you are directing the growth. In addition, it is important for any business consultant to have real field experience in running a business. Both parties must make expansion and growth moves. You must also seek to create an extensive academic economic education, as the financial aspect plays a key role in future moves. If you want to expand your business, you must know the trends of the present.
Begin with diagnoses and financial reports
Before you can decide how and where you are going to go, you must first understand where you are. You need to know exactly how much the business is currently earning. What are its expenses and revenues, gross, operating and net profit, loan repayments, and liabilities? Usually the answers to these and other questions are not exactly known to business owners, so you should start with building financial reports.
These are structured and clear reports. An orderly business consulting process will give you the answers. The reports clarify the current situation and are used to make informed decisions later on. It should be noted that this picture can not be obtained from the profit and loss statement. You must delve deeper. You must look at the income in business expenses. You must look back over the months and present the situation retrospectively. For most business owners it is complex to understand.
The financial statements issued by the business consultant are simple to understand. They encompass all the components of running the business, whether it is reports related to cash flow. It must also take into account various problems and liabilities, profit and loss statements that relate to what is done in real time.
Moreover, the economic reports will also allow for the building of an adequate budget down the road. Whether it is decided to increase investment in advertising, discounts on products, raise salaries as an incentive for employees and more. In other words, the economic reports give an accurate diagnosis of the state of the business today. The foundations and data on which the expansion and growth can be built.
Re-pricing and remodelling of the business
The success and expansion of the business goes hand in hand with increasing profitability, and this can be achieved in a number of ways. You may want to look at the problems with the business and fix those first and foremost. Then you may want to look at pricing structures to align with new trends.
This must be carried out with the business advisor in a calculated and careful manner. For example, according to the data, you can promote increased profitability and sales turnover by investing properly in advertising and marketing. You can also address the realm of property by lowering prices with your suppliers or switching suppliers. It is also possible to outsource franchises and expand activities. You can outsource some of the business activities, introduce advanced computer systems and more. The list is long. Do you need to expand your business? A better workspace? In this case you may want to look at an Executive Workspace.
All of these are of course options that will be carefully considered. One of the steps that is certainly important to perform is re-pricing the products to increase profitability. From the financial reports we can also understand whether there are more and less profitable products than others. We can also see if the pricing in your business is indeed professional and correct. In most cases, the pricing is not good enough because it was done in a hurry, or based on missing data, so you can assess the full situation.
In fact no one has a single formula for the exact pricing of a service, project or product. A specific adjustment needs to be made and a thought process that takes into account both accurate data and indirect aspects. For example, consider your expenses like raw material and service provider costs. Including total business expenses, expected overheads in the coming year and so on.
You also need to answer the basic question – how much do you want to earn? This depends on the industry in which you operate and the profit margins accepted in it. It also greatly depends on the branding of the business and the uniqueness in terms of location, shopping experience, reputation and more. Of course, the purpose of re-pricing is to bring you to a state of better and optimal profitability. This will also support growth processes if necessary.
However, as you probably understand, this is not an arbitrary raise or a rampage, but rather all aspects are taken into account. For example, we must take into account the prices of competitors too. Are they likely to undercut you? How is the branding of the business, whether you place emphasis on luxury products or popular prices. However, the average pricing of competitors can not be a major benchmark for pricing. What needs to be in front of our eyes is first and foremost pricing that suits the costs and yields the best profits.
It should be noted that support for the success of the business and its growth can also come from a more or less uniform price increase. In most cases, a small increase of up to about five percent will be accepted with understanding by your customers.
Afterall, they will choose you not only because of the prices but because of the familiarity, trust, shopping experience, products and so on. A general increase in prices at a reasonable level may be achieved with understanding, and it will contribute greatly to your cash flow. It will allow more leeway in the changes you seek to make in the business.
At the same time, this increase must also be carried out intelligently and with the help of a financial consultant. In light of understanding the current situation in the economy and in the field of activity in particular, understanding your customer base is vital. Carry out some market research for better understanding.
Streamlining business and improving management
Growth goes hand in hand with increasing profitability. This can be achieved through proper pricing of products and services. It can also be achieved through the reduction of unnecessary expenses. A review of your business will surely raise a few questions. You will look at new ways to manage your business. You will also realise what is working and what isn’t and how to make the most of your finances for a successful future.