How to increase earnings for your business
If you are a business owner you should be constantly concerned with how to increase earnings for your business. There are three areas to look at to get more net income from your business. The first thing to look at, is sales of your present services or products. Have you identified your target customers? Do most of the people in your market, who could be your customers, know about your business? If not, what can you do to let them know about your business that will not break your advertising budget?
Secondly, think if there are related streams of income, that you are not taking advantage of. Is your business involved in land development? Perhaps you can rent out space to billboard companies while your development project is being approved. Do you own a video editing company? You may want to rent out the use of your facilities on an hourly basis to people who have small projects to complete, but who don't own the right equipment their project requires. One South American manufacturer takes the metal shavings left over when their fastener division makes nuts, and uses them to make steel wool. Are you spending enough time with your best customers to find out if there are other products or services that they might like to buy? If they have needs that are not being meant, then perhaps you can add a new service or product to your line.
The third area you need to look at is cost cutting. Less money spent does not always mean less quality received. Major expenses should be reviewed on a rotating basis, perhaps looking at two to three of them each month. Don't skip an area just because you think that there is no way to lower a particular cost. Are you really sure that the suppliers you are using offer the very best price and quality? I once worked for a telephone cord manufacturer that thought it could only afford to buy 'c bands' (the metal ring next to the strain relief on the old 500 series telephone cords) from a local supplier. When the local supplier implemented a huge price increase, we were forced to look farther afield. We found a better and cheaper product half way across the country, in Ohio. We should have looked earlier. Don't repeat our mistake. Look for better alternatives for ALL of your major suppliers now.
There are four areas that many small business owners tend to skip overwhen cost cutting.
Can you save on rent by negotiating a better deal or moving to a different location?
Have you asked for insurance quotes from a competitor of your agent?
Have you met with your accountant to see if there is any way to lower your taxes?
Have you looked at your employee roster to see if you have any unnecessary employees? This is perhaps the most unpleasant task of all, but it is necessary for the continued financial health of your business.
Have you checked to make sure that product or supplies are not slipping out the back door, unpaid for?
It is not enough to understand how to increase earnings for your business, you need to make time to really deal with each area on a regular basis!