BUSINESS ADVICE • 7 SEPTEMBER 2021 • 5 MIN READ
3 tips for making more money in your business
Most small business owners are confronted by a huge array of responsibilities: sales, customer management, recruitment, admin, cash flow and more.
Sometimes it’s hard to focus on the bottom line – making money! Imagine you had an extra $500 a month? What would you do with it? Or an extra $1,000?
This actually well within the range of most small businesses – it just needs more attention.
Here are some of Beany’s suggestions for bringing more money into your business.
Set a goal
That sounds easy, doesn’t it?
Actually, many people make the mistake of not knowing exactly where they are starting from, which makes getting anywhere difficult, so first work out exactly where you are at.
Boom – there’s your profit, or loss, for the current period and your year to date information.
We suggest running the report with ‘comparatives’ for the month or year. This is an awesome way to see your current figures and compare against the previous month/year.
Look at the information from the top (income) right down to the bottom looking at each account (expenses) in turn.
Don’t necessarily look at the current month as not all expenses may be recorded. Instead, look back at earlier months and get a feel for the pattern of your income and expenses. Are there any expense accounts that look unusual?
Click on them. This will take you through to the detailed information and you can see what is in that account.
Extra Tip: Right click to open a new tab for each account.
Spend 30 minutes on this exercise and make notes about expenses that are unexpectedly high, or you realise you can reduce.
From these notes, set yourself a target of savings or income improvement, for example,
- Increase sales by $200
- Reduce subscriptions by $100 by removing an old subscription you don’t use
- Call the bank and negotiate a better credit card/bank fees rate – saves $50
- Call a key supplier to get a better rate – $250
Once you have your goal, diarise a task a week for the next 4 weeks so you can tick off your to-do list.
You can choose more challenging goals than our example above – but be realistic about how long it takes to implement tough change.
Monitor the difference
It is very important that you keep an eye on how your actions have changed things. This creates motivation for more change.
You can monitor the improvement in different ways so consider what will work for you.
Do it yourself
You can diarise an hour a month to sit down with your Xero file and review each goal and see what has worked. To do this requires a certain amount of self-discipline, particularly when life gets busy.
Get others involved
You can ‘appoint’ an advisory board of people you trust who can hold you to account. Business Mentors offers a fantastic service of virtually free business support. Your mentor can form the backbone of your advisory team.
Companies can appoint an actual Board of Directors, especially if there are unrelated shareholders. This can seem daunting for small and medium sized business owners – but is worth considering. A fellow director has a great deal of responsibility and it can be good to share the load.
Ask the professionals
You can also enlist other professionals like your accountant, someone from your industry or professional association. However, beware of advice from the un-qualified. Choosing your advisors takes some skill, and trial and error can be the only way to find the best ones for you. There might be someone better than the guy at the pub!
However you do it, the key thing is to do it regularly, be honest about the results and keep up a process of improvement. Once you’ve achieved some change, think of it as the start of more, rather than the end.
You should always enjoy your business, of course, but you should always look to make money – that defines a business. Otherwise it’s a hobby.
Follow your passion
Develop a business from what you love doing and what you are really great at. Passion is a powerful sales tool and drives excellence.
Play to your strengths
You’re not good at everything (sorry to break that so harshly) so know what you’re bad at and find someone to work with who can fill the gap. If you’re not sure about what you’re bad at, then here’s a surefire way of finding out:
- Review your life critically and make a short list of 3 things that didn’t work out so well – what’s the common factor?
- Or ask your partner.
Manage your weaknesses
Be flexible and dynamic…
…about your methods, and firm in your beliefs!
Hold your core but listen to what the market/advisers/results are telling you. It can be all too easy to either slide away from your core product or hold too fast to failing methodology.
Monitor your results and act on what they are telling you
Plan for the future
And finally, be smart about what you do with any extra cash in the bank. Make a plan about this as well.
- Pay down debt
- Use it to be more productive by buying new machinery, or on training for and your team
- Invest more for your future in Kiwisaver
- Treat yourself (occasionally!)
Whatever you do with the surplus, do it consciously and prepare for your future.
Sue de Bièvre
An intrepid entrepreneur and feminist with a penchant for disruption; spotting problems and rolling her sleeves up to fix them makes Sue tick.
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