Key Tip - Maximize Profit Through Better Operations

Often times as business owners, we plug along with servicing customers, managing staff, and putting out fires that we rarely take a look at business operations from a 30,000 foot view.  Instead, we should spend more time working on the business, not in the business.  Here are 3 quick strategies you can begin implementing to streamline operations, maximize profits, and get some of your personal life back with peace of mind:

1. Streamline Processes with Automation
   With the enormous shift in AI and technology upon us, it is imperative that you learn how to implement some of this into your business.  Whether it is chatGPT to help you write blogs, using Slack to improve communication with your team, or integrating your proposal process with your CRM, business owners can free up valuable time for strategic planning and scaling their operations.  Also, automation minimizes errors, improves consistency, and reduces the need for manual labor, which can save you Bookoo Bucks.

2. Enhance Employee Productivity
   As a business broker, I often look at a business owners’ financials only to see that their payroll costs are eating up essentially all of their profits.  Most small business owners think that they absolutely need every employee to keep the operation, but usually isn’t true.  Is everyone busy 80% of the time?  Can you do some of the tasks to save more on profits?  Labor productivity is the #1 driving force for a small business’ overall health.  One key metric to look at is Gross Profit / Direct Labor Cost.  If this is above 2.0x, then you are in good shape.

3. Focus on Customer Retention
   Acquiring new customers can be crazy expensive, especially with the ever-rising cost to acquire a lead through Google Ads or other digital marketing channels.  Instead, focus on retaining existing customers and get them to spend more with you, whether it is through upsells or increase service offerings.  Implement some type of loyalty program, gather feedback from existing customers and actually use it.  Then, focus on building long-term relationships with the clients. Repeat customers are more likely to refer others and make larger purchases, helping to stabilize and increase revenue over time.  Seriously, this is one of the most cost effective ways to improve your business and create long term value.