Improving your operation’s bottom line is essential for the financial health and success of your business. When it comes to everyday expenses, it is often difficult to see how routine items can become budget busters. Sometimes it is a matter of competitively pricing commodity items to uncover savings.
Other times, antiquated equipment or even out of date marketing materials may be hurting your productivity, wasting time and energy or simply representing your products and services in a poor manner.
Is your business an efficient profit generator? If not, step back and implement a plan that increases your bottom line while moving your company closer to meeting its revenue goals.
1) Find five key success factors for your business and monitor them routinely.
Measurement and benchmarking are central to knowing where your costs and gross profits lie and determining where they should be. Your accountant may be able to provide you with benchmarking tools that show how you compare to similar size companies in your industry. Key areas to measure include are liquidity, revenue, assets, borrowing and operating yield.
2) Establish an advisory board of key customers and use them.
Your customers are your greatest resource for feedback. Whether you are launching a new product or you think you are providing superfluous services ask them.
3) Create strategic alliances or joint ventures with suppliers or customers to market each other’s products.
Working together with another company can reduce advertising costs while gaining added exposure. If you are in a services industry, consider cosponsoring events and seminars. Teaming up lets you show off your expertise to a broader audience.
4) Review insurance often. Take advantage of non-biased third party consultants. Don’t let vendors get too complacent with your business.
A great place to start is to look at current policies. Business owners should review loss control, safety concerns and compliance issues regularly.
“On any given day you can save a couple of dollars on insurance,” said R. Scott Wolff independent insurance consultant of Premier Risk Management, LLC. “However, if that plan is not meeting all of your needs you may spend more money in the long run.”
5) Develop a CEO monthly letter to employees to build teamwork and communication.
Communicating with your employees can directly affect productivity. Employees should be kept in the loop of customer relationships and other internal information. Monthly newsletters can also be used to show appreciation and make employees feel valued.
6) Spruce up your image and keep your graphics consistent and up to date.
Are your brochures out of date? Are invoices and letterhead missing important elements such as website, Facebook or email addresses? Keeping up on brand, address or service/product changes is critical to your business. Plus, today’s marketing hardware can serve multiple uses to maximize your investment.
“Stay on top of your marketing efforts by getting point of purchase signage for trade shows and presentations,” said Gary Wilbur president and CEO of R. S. Knapp/Napco. “Using your portable trade show displays for various purposes (such as a lobby display) will create an added benefit.”
7) Attack accounts receivables collections beginning with the most current first. Work your way back to the oldest accounts as time permits.
Make sure your bookkeeper is reaching out to delinquent customers regularly. Don’t be the bank; cut off customers who owe you money for extended periods of time.
8) Maximize employee retirement plan benefits by creating a pension or 401(K) plan as well as medical reimbursement plans.
Having a 401(K) plan helps employees save income taxes and prepare for their retirement.
“Don’t just have a 401(K) plan, offer a company match or profit sharing plan,” said Hunter Group CPA LLC Director Tod A. Christianson, CPA. “Include a sharing contribution to encourage more participation. Be sure to remove people who have been terminated that have low balances in the plan in order to reduce the per participant fee.”
Samantha Feller is marketing coordinator at Hunter Group CPA LLC, a full-service Certified Public Accounting firm that serves closely held, small to middle-market businesses that are entrepreneur managed or family operated enterprises. Established in 1956 in Paramus, the firm provides bookkeeping, tax preparation and auditing services, as well as accounting and consulting on a wide range of financial issues.
Additionally, the firm provides audit services for non-profit organizations as well as audits for benefit plans, including 401 (k) plans. Hunter Group also operates two affiliated companies, a financial planning and wealth management firm and a recruitment firm dedicated to placing financial professionals.