Business appears to be good, eh? Selling things doesn't mean that you'll reap the rewards of your effort...profit! Sometimes sales can actually hide fundamental faults or issues within companies, both large and small. Getting more sales, while making a profit is the name of the game and here are some suggestions:

1- Increase productivity by expecting 25-50% more from everyone. Yes, this is a bold statement, without a bold goal and communicating it, nothing is likely to happen. However, you'll also have to provide the best tools and training needed to produce more, without the stress.

2- Extend your product/service line. Look for ways to add more to your existing business. Ideas that do not add to inventory levels or require heavy investments in machinery or equipment are the ones to go after.

3- Challenge your assumptions about the marketplace. The truth is profit is temporary. By challenging our assumptions about our Customers and what they want will keep us in touch with the changing world around us.

4- Identify the top 20% of your Customers and talk to them. Simple, yet most business do not talk to their Customers. There is a strong belief by many that it is not the ‘share of market' that leads to success but the ‘share of Customer' that leads to profitability.

5- Invest in new products and services. Take 1% of your sales and invest it in new products or services, not a huge risk and over time you will find something that produces additional profit for you.

6- Hire people and have people who exhibit traits of strong self-initiative and competence. All other employees are average and your business will produce average results. Exceptional employees generate exceptional ideas, exceptional ideas lead to exceptional profit.

7- Open the books to your employees, and share in the profitability of the company. When people know what is going on, the role that they play in accomplishing the goals and realize that something is in it for them, they will support the company. And, instead of leaving and starting their own business [thus increasing your competition] they just might stay and contribute even more.

8- Review all of your Customer complaints. One bad experience by a Customer and he/she will tell at least 10 others, something you don't need. Don't rationalize what happened concentrate on getting rid of the causes.

9- Develop a marketing program that sells. Most marketing and advertising programs can be described as ‘stuff being sent out'. Customers buy for two reasons: solutions to problems and/or good feelings. Your marketing and advertising programs should position your company accordingly. If your program doesn't do so, either revamp it so that it does or don't spend the money.

10- Automate, automate, automate. Technology can be scary, and in my view, life without technology would be worse. The real benefit of using technology is that it forces you to establish patterns, templates, norms, procedures and you'll accomplish much more in shorter time frames.

Bonus: Demand that your accounting system be more than a recorder of ‘debits and credits' and that it contributes valuable information about your business, your products and your Customers.

Increasing sales doesn't necessarily mean there will be more profit. The fundamentals of business, marketing and advertising, finance, and operations contribute greatly to a profitable company. Chris Egsgard, a dear friend (and fellow entrepreneur) corrected me the other day, when I said that "knowledge is power", Chris said: "knowledge plus energy is power". It seems to me that you now have a number of key ideas about how to make your business more profitable, go forth and do something about it!

Feel free to use this article, just give credit where credit is due!
Copyright 1997 © Sid Ridgley