Every company cares about their business profit; business profit is the amount of money a company retains after it subtracts its total expenses from its total revenue. The closer a business is to operating at maximum efficiency, the higher its profit should be; this is because all of that businesses resources will be used in the most efficient way possible and there would be minimum waste if this were the case.
However, for many companies, this is not the case; their business is not running at maximum efficiency, and this is because they are using sub-optimal processes that ultimately make their operations deficient. Often, these companies lose out on potential business profit and generate more expenses than necessary–But it doesn’t have to be that way.
There are several quick changes your business can make to its operating model that allow you to cut back on costs, or increase your revenue, and therefore increase your overall business profit. Here are three easy ways your business can optimize to boost its profit.
1. Be Flexible: Know What Your Customers Want
At the end of the day, customer satisfaction will be a crucial factor in the success of your company. That being said, it is important to be flexible and listen to your customer’s demands, and then adapt your business accordingly so that your company can have a user-base that is highly satisfied with the goods or services being provided.
So you might be wondering, how can my company become more flexible? Well a simple way to become more flexible as a company is to make offerings to your clients that seamlessly align with their lifestyles; this could be as simple as keeping up with consumer trends, for example, knowing that there is an increasing number of people who prefer to shop online, and therefore, opening up an Ecommerce division if your business only has a brick and mortar location.
The bottom line is, when you can accommodate as many customers as possible, this should lead to a higher amount of repeat customers and referrals by word of mouth, which in turn, should boost your companies sales and bring in more revenue.
2. Automate as Processes as You Can
Automating manual processes has been proven to significantly cut costs as well as reduce the risk of human error occurring in a process. If your company has repetitive, yet, manually completed business processes–for instance, maybe billing or data entry—then one of the easiest ways to reduce your costs is to automate.
“Repeated manual processes such as paper checks and traditional invoices are inefficient and labor-intensive,” says Joshua Reason, Sr. Director of Growth at Currency, a multi-national payments company that has helped their clients become more efficient by computerizing their invoicing process.
By digitizing and automating the payments and billing process you’re able to cut the labor-intensive tasks associated with invoice intake, data capture, matching, approval, and reporting. It’s estimated that North America alone is spending upwards of $180 billion annually on AP processing and labor costs.”
By having a computer software complete tasks that are usually done by staff, you will be able to save time and therefore save money–because you will no longer need to pay a team member to spend the time and energy to complete the process. In addition, when a process is computerized, there are typically fewer steps involved which makes the entire process less susceptible to error because there will be fewer points where erroneous information can enter the equation.
All in all, automating manual processes will save your company a significant amount of time, because the process will be computerized and will not have to be done by hand, a significant amount of money, because you will no longer need to pay staff to complete the job, as well as significantly reduce error margins, because there will be fewer places in the process at hand where things can go wrong.
3. Offer a Variety of Payment Methods
Our final, and most likely, the easiest tip for you to implement that will allow you to see an increase in your business profits is that you should offer a variety of payment methods. Offering a variety of payment methods can be the difference between your business making a sale or not — just think, there have probably been times when you were looking to pay with a card, only to find out a business was cash only. However, if that business offered credit payment options as well, that could have easily been another completed sale for the company.
In 2019, it is important to offer a variety of payment methods including 853cash, credit and debit card, ACH, and even innovative methods like digital transfer services–think Paypal, Venmo, and Square Cash — as well as cryptocurrency like Bitcoin. A simple way to summarize the ideology behind offering more payment methods, is that with a bigger net, you should be able to catch more fish, because if you provide a variety of payment methods, it becomes more likely that a consumer is going to find a payment method they are comfortable and able to pay for the good or service with.
Takeaway: How to Increase Revenue and Decrease Expenses
In essence, these three easy ways to boost your business profits convert inefficient processes that your business might be using into efficient operations that are likely to optimize your business model, and bring your company closer to running at maximum efficiency.
Creating satisfied customers, automating processes that are traditionally done manually, and offering as many payment options as possible are easy ways to increase revenues and cut expenses out of your business. And the more revenue you bring in, as well as the fewer expenses you have, the more likely it is that your gross profit will increase–something that every business is interested in experiencing.