It is important to go into every year with a better understanding of your business. Every business wants to increase their profits. When you ask a vendor for their advice on what you can do to improve in this area, the most common suggestions are to focus more on increasing sales and your profit margin. Unfortunately, while the answer is simple, the methods used to achieve these goals aren’t so cut and dry. To help you accomplishing your 2019 sales goals, here are some helpful tips on other ways to increase your profitability.
Cutting the Fat
It is always important to look over you expenses to see what you can reduce or even cut out completely. Advertising, for example, can fluctuate depending on your business. A vendor should 10% of your current advertising budget for last minute opportunities rather than spending on costly annual commitments. Utilities are also expenses that need to be reviewed often to see if you can lower you overhead based on your usage. Repairs and maintenance can also incur heavy costs. Instead of committing to a contract, it may be your best interest to pay for repairs needed
It is critical to set time in you calendar to do routine review of your policies and expenses to make sure you are not paying over. This also includes things such as insurance. Remember to ask your representative to review your policy and ask where can you save money. You also want to make sure you are not paying for anything that doesn’t apply to you. For example, if you are renting a space, do not pay for coverage because that is the landlord’s responsibility.
Reducing expenses isn’t the only way to improve sales in a business. Wages are often the expensive cost in any vendor’s operation can incur. It is crucial to review your sales history and analyze the flow of traffic. What are the highest peaks of activity during a normal week? This will be helpful when you have to revise your employees’ scheduling to see where you can reduce hours during slow periods.
Pick the Right Banking Institution
Leveraging your banking institution also plays a critical factor in optimizing profits. Look for a bank that gives you the most for your dollar. Ask your advisor where can you save money by banking with their company. Just like your shoppers take time to compare prices from competitors, don’t be afraid to do the same with banks.