I AM IN BUSINESS AND WANT TO DO BETTER
5. How to build a profit plan for your business
While everyone goes into business to make a profit, not everyone goes into business with a plan to make that happen. A lot of companies operate on the assumption that you don’t need a plan as such. You just need to sell more stuff. Making a profit in business isn’t quite as simple as that, but it’s not overwhelming either. You can break it down into small, incremental improvements over your whole business, and this is where a profit plan can help.
This type of plan segments the biggest influences on your profits. It breaks things down into more manageable areas from which you can make the improvements you need. On their own, they might not look considerable but when you add each segment together, the final result can be significant.
You don’t need to make wholesale changes to your business to improve your situation. For example, a 5% increase in your conversion rates can produce a surprisingly good result in itself. That’s just one of the four key action areas that should be part of your profit improvement plan. Let’s look at all four:
- Generate more sale leads. Without leads, there are no sales, and without sales, there is no profit. Therefore, improved lead generation is number one on any profit improvement plan. The first step is to identify your target market, as you can’t connect with your ideal customer if you don’t know what who they are, where to find them, and what they want.
You can generate leads by promoting your products or services in a way that will tempt your target market. That’s why your marketing plan and your profit plan go hand in hand. Your website, social media, digital marketing, email marketing, pay per click advertising, industry events – any way you market yourself needs to be improved to get more leads.
- Sale conversions. The second step is to turn leads into customers, and that is why sale conversions are next in the profit plan. Increasing your conversion rates depend on several critical factors, including following up on a lead with a speedy response, targeting qualified leads ahead of non-qualified leads, having appealing incentives, and a compelling offer. There are many ways to create profit through higher sales conversions, and we can discuss them as part of the overall plan.
- Reduce costs. Cost reductions are an obvious way to increase margins but only if it’s safe to do so. Trimming costs in an indiscriminate manner can affect quality and service levels, which is detrimental to your profit in the medium to long term. By including sensible reductions as part of a profit improvement plan, you can identify areas where you can make harmless cuts.
- Overall efficiency. Improved efficiency means you complete tasks quickly, with less waste, and more productively. An example might be outsourcing one-off projects, or bringing in technology to handle time-consuming manual tasks, or carrying out a time and motion study of routine procedures.
By developing a business profit plan to manage the above action areas, you can ensure they remain top of mind. This tool will allow you to build a plan without exposing your business to unnecessary risk. You can compile a range of actions and solutions that you can tailor for your business, and this resource can be the foundation of well-planned success.
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