The majority of businesses who limp along do so because they are not able to generate enough cash flow to be truly successful. The lack of money is typically caused by internal problems – problems which the owner has control over and can fix. If you are willing to do what it takes there are many ways to increase your bottom line.
Contrary to most business owners’ beliefs, external forces are responsible for only a small fraction of their business struggles. Commonly, a company has money trouble because the owner will not or does not know how to deal with his operational difficulties.
But, it does not have to be this way – profit, margins and cash flow can all be increased when problem are identified and corrected. Here are 3 places to start.
Put the right person in the right job
This is a vital part of any efficiently run business. It is often ignored, especially in companies where family and friends are in jobs they are not trained or suited for. Putting people in positions they are not capable of doing affects your net profit (i.e. low productivity, increased rework and quality issues, employees’ unable to complete job duties, poor morale).
Upgrade your management skills to learn how to accurately assess your employees’ abilities, knowledge and know-how. Everyone has strengths and weaknesses; assigning people tasks they can do well makes you, them and the company’s bottom line happier and healthier.
Everyone is held accountable for their duties and behaviors
Lack of accountability is an enormous problem in most workplaces. This area alone is responsible for a lot of businesses’ poor profits – from low margins and no growth to closings and bankruptcy. If people are not held accountable to do their jobs efficiently the bottom line suffers. This includes everyone, and everyone includes you.
It is a no-brainer. When people are held accountable for their responsibilities and behaviors workplace morale, productivity, profit, quality, sales and customer satisfaction increases. While theft, rework, mistakes, waste and turnover decreases.
Communicate, communicate, communicate
One of the single biggest complaints employees have about their jobs is, “The bosses don’t know what’s going on in this place. No one knows what anybody is doing. They don’t listen to us and never tell us anything.” One of the single biggest complaints customers have about companies is, “I can’t get anyone to talk or listen to me. Their customer service is horrible.”
Poor internal and external communication directly affects profitability. Good communication will increase the bottom line and bad communication will decrease it. Billions of dollars have been lost simply because somebody did not pass on important information, talk over a problem, speak up with a concern or pay attention to a good idea.
These 3 ways a company can increase its bottom line are not the only ones available, but they are a good place start. If you do them well you may not need anything else. Business owners confirm the rewards – more time off, happier employees, less stress, a secure future, increased income, better quality of life – are worth it.
Poor internal and external communication directly affects profitability. Good communication will increase the bottom line and bad communication will decrease it. Billions of dollars have been lost simply because somebody did not pass on important information, talk over a problem, speak up with a concern or pay attention to a good idea.
At Cogent Analytics, we never stop looking for ways to improve your business and neither should you. So, check out some of our other posts for helpful business information:
