Every business would like to see their profits sore and, of course, many would first think about putting up their prices in order to do this. However, there are savings that can be made in almost every business which will boost profit margins before the big customer squeeze needs to take place—if it does at all.
In fact, squeezing your customer for more money without actually changing your products or services in any way may not result in the outcome that you actually want, as you may find that your customers will start looking elsewhere for the products or services that your business offers. Here are some helpful tips for improving your business profits.
1. Check your outgoings, especially utility bills
It is important to know exactly what is going out of the bank account every month and where the money is actually going. You could very well find that you are paying for services that your business is not making use of—or that you could get much cheaper elsewhere. In fact, this is very much the case for most utility suppliers that are constantly vying for each other’s customers, and could, therefore, offer you a discount for changing or for staying, should you let your current utility supplier know that you are going elsewhere.
You may also find that you are paying for warranties on machinery that you either no longer own or that just frankly aren’t worth worrying about, as you could consolidate all of your machine’s maintenance to just one outsourced business to take care of.
2. Improve your product quality
A very strong contender for increasing your profits is to improve the quality of products and services that you offer your customers. It could be that improving the quality in itself means that you are able to ask for more money per unit than you currently are; or if you are offering a service you could offer up sales such as a service plan or warranty and charge extra for this.
Of course, in order to supply better quality items to your customers you may very well find that you have to stock better quality components from your suppliers. Quality tends to be viewed through the eyes of the customer, so you will have to let them know where the quality lies so that they can evaluate whether or not it is worth paying you more for your products than your competitors with their lower quality items.
3. Train your employees
Investing in your employees by training them to do their job is a must. You may very well find that your employees work faster and more accurately with training as it will build their confidence levels as well as their knowledge. This will undoubtedly result in a higher quality of work, better production rates, and far lower rework issues to contend with, meaning that you will get more for the hourly wage that you are currently paying, as well as saving on the sheer number of wasted units and components due to scrappage.
Training does not have to stop in-house, though, and you can make your employees feel more worthwhile by offering to pay for their training and qualification—should they take a subject offered by a university in an online training program that would highly benefit your business as well as their career.
4. Remove your fleet expenses
Owning your very own business fleet of delivery vehicles can be expensive, especially when you take into account insurance, maintenance, and the periods of time that your delivery vehicles are either left empty or sent out part loaded. Instead of having this expense, you may find it beneficial to seek a shipper load board to advertise your shipping work, and therefore only pay for shipping services as and when you require them.
It is possible that you could use your drivers elsewhere in your business should you feel that you are not wanting to lay them off, and they will probably be very helpful within your logistics department or your warehouse facility.
5. Control your stock levels
Obviously, it is important that you control the stock levels within your business—not only of the items that you have on site, but also of the stock items that you require for your manufacturing. Having additional stock laying around may seem like a good idea when your products are in high demand, but in reality, they are hoarding space and are dead money, waiting on the shelf to be used or sold depending on which end of your production scale they are on. Not only this, but many items including electronic goods do actually have a shelf life as certain components and coverings can deteriorate over time when exposed to certain conditions.
6. Look at the working environment to improve employee absences
There are many reasons why a workforce of any particular business can be hit with multiple events of employee sickness: it could well be that there is a virus of some sort making its way round; or there could be other issues that you may be able to help with. For instance, there is such a problem as sick building syndrome which can be sparked by lighting, ventilation, or chemicals that are used within the working area or when your building is being cleaned.
Make sure there is adequate lighting for all of your workers—not too bright, but at the same time provide enough light to be able to see. Lighting placement can also help, as shadows can cause eyestrain or even cause the employee to do inadequate work. Any lighting strips that are malfunctioning or bulbs that have shorted will need to be replaced, as flickering lights can cause employees to suffer from headaches, migraine, loss of concentration, and nausea. Not only this, but it is dangerous to those who may suffer from photosensitive seizures.
When it comes to ventilation you should make sure that your air conditioning unit(s) are well maintained and are serviced every twelve months. Bacteria can grow inside air conditioning units and be pumped out into the working environment. This can cause employee sickness as well as very serious illnesses that attack the respiratory systems.