Strategies to Increase Profitability
Almost every business owner wants to know the best strategies to increase profitability without upsetting their client base with a large price increase or firing their full time employees.
There is no ‘quick fix’ when it comes to increasing the profitability of your business – it will take time and effort for this to happen. Luckily, we do have a few actionable tips and strategies that may speed up the process of growing your profits.
Read below for further details.
Leverage Your Use of Technology
Using technology to increase your company’s profitability is one of the smartest and easiest ways to begin making headway toward your financial goals. Choosing to implement the best software that fits your company’s needs for each application your people use can help improve the productivity of everyone in the company whether it be your accounting department, HR person, or sales team.
You don’t need to go overboard with technology. Instead, pay attention to the parts of your business that are less efficient than others – is your team struggling to communicate, manage the costs of services and materials, or handle billing and payroll? There is a type of software to help solve these problems.
Consider meeting with an IT consultant that specializes in your industry’s needs to help you learn about each of your options and the best ways to use technology to your benefit. Another option that can help you leverage technology to increase your profits would be to use a managed services provider (MSP).
MSPs can help you make decisions about technology strategy, ensure that you receive the most value from your infrastructure, provide technical support, while also monitoring and maintaining your networks.
Improve Communications to Avoid Duplication of Work
As you continue to use technology to increase your profits, you will also want to improve how your employees communicate with one another and people outside your organization. This will mean that you might have to consider using new ways to connect with one another to improve your collaborative efforts.
When all the parties involved with a project can communicate easily with one another, workflow improves. Ideas, suggestions, plan changes, and new requirements can be documented in the copies of your original plans which allows everyone to adjust their tasks as needed.
Employees, managers, and leadership members who communicate effectively and do so often can help reduce the number of projects requiring duplication or work and effort. Reducing or eliminating the need for duplicate work can quickly improve your profit margins.
Invest in Worker Training to Reduce Project Duration
Workers who lack proper job training can cause the duration of even simple tasks to increase substantially due to the need to redo work and delays relating to learning key components of their job on the fly.
Make it your company’s practice to offer job-related educational opportunities for employees to give them the knowledge they need to complete their job efficiently. Supervisors should be given additional training to help them manage their team, create budgets, gauge progress, and quickly adapt to changes.
Educating your team about industry-related news as well as specific needs for individual projects can help keep your company from falling behind due to a lack of knowledge regarding updated standards.
Change Your Pricing Structure… And Bid Accordingly
Most business owners don’t want to dramatically increase their pricing for the fear of their clients using a competing business. Luckily, you don’t have to hike your prices to extreme levels to see profitability from changing your pricing structure.
To change your pricing structure without affecting your existing clients, you’ll want to have a way to qualify your leads so that you spend less time and effort focusing on non-clients. You need to learn all of the details about your labor and materials costs to help you accurately price your services within reasonable profit margins.
By spending less time on unqualified leads, you increase your income generating productivity. You may also choose to specialize in certain niches of your industry, only bidding on jobs that fit within certain specifications.
Although these tasks can be done by keeping careful notes, making calculations, and constantly researching, you’ll find that using the right technology and software programs can make this job far easier.
Use Highly Qualified Third-Parties
No matter which types of labor and services you choose to outsource, you’ll want to ensure that their work matches or exceeds the quality of yours. Ask about their products, talk to former clients, and learn about their timeliness and pricing.
Whether you’re looking to outsource part of a job or if you’re interested in using a third-party company to provide services within your business, choosing the cheapest price rarely will give you the results you want.
Spot Migration is a perfect example of this – we’re rarely the cheapest IT consulting firm or managed services provider. We don’t aim to be the most expensive; our pricing simply matches the quality of our services.
Our skilled staff would be happy to walk you through how using a combination of several types of technology, a managed services provider, and the right software solutions can help quickly increase your company’s profit margins.
If you would like to see how our team can help build and implement different IT and tech strategies to increase profitability in your company, book a call with us.