After family and friends, many of our thoughts turn to our businesses and our employees as we ring in a New Year. How will we keep growing – and not just growth, but profitable growth?
Some of us had a challenging 2009, with lower sales and lower earnings – and a lot of belt tightening.
But even if you had an outstanding year in 2009, most businesses have room for a little improvement in profits.
I polled some of my business owner contacts to see how they would answer the following question:
“What is the number one thing you can do to be more profitable in 2010?”
Here are their answers:
Meet the Customer’s Pain Points – says Jonathan Fields, Author of “Career Renegade”
“The pain points for a lot of markets have moved in a substantial way in 2009. Problems have changed, needs have evolved. Look back, ask how the points of maximum pain have moved for the market you serve. Then adapt your solutions to better serve those new points in 2010.”
Hire a Cost Containment Firm – says Gene Marks, Author of the “Streetwise Small Business Book of Lists”
“Consider hiring a cost containment firm. My clients have used Alliance Cost before but just use Google to search "cost containment solutions" and you'll find plenty of others. These firms will analyze what your spending and suggest ways to reduce your overhead. They'll re-negotiate supplier contracts or (with your permission) replace your suppliers with their lower cost suppliers. Most of these firms take a cut, sometimes up to 50%, of the first year's savings and then leave the rest of the future savings to you. I've seen companies cut their overhead by as much as 10-20% using these companies. Be careful though - they'll turn your place upside down looking at invoices and talking (with your permission) to your suppliers."
Pay Attention to Your Good Customers – says Pamela O’Hara, CEO of BatchBlue Software
“Set aside time each day for connecting with your customers by sending personal e-mails, reading their newsletter and blog, and following them in social media. These are the folks most likely to buy more of your product, refer you new business and help you build a better product. Treasure your relationship with them.”
Actually Use Planning, says Tim Berry, President of Palo Alto Software
“Actually use planning -- not the formal plan necessarily, but the optimized just-big-enough planning process -- to translate long-term goals into short-term specific pieces that you can track and manage with course corrections, so you end up focusing on what's most important, and steering your business in the right direction. And that means not just a plan, but a regular plan review with course corrections.”
Follow 4 Steps to Profitable Growth – says Andy Birol, Author of “The 5 Catalysts of 7 Figure Growth”
“Follow these 4 steps to profitable growth:
- Ensure every sale to your customers is profitable.
- If not, increase your prices, or find new customers.
- If so, use your profits to pay down your debts, invest in prospecting or develop new services and products
- Add value through your expertise and increasing the customer’s experience, never by adding material or labor costs.”
Online Marketers, Know Thy Keywords! – says Travis Campbell, MarketingProfessor.com
“Knowing what keywords convert is essential and will be a huge competitive advantage for online marketers in 2010. A conversion could be a new opt-in subscriber, buyer, or both (preferred). Those who know what keywords to focus on will be more profitable and distance themselves from their competitors.”
Empower your Team – says Geoff Karcher, CEO of The Karcher Group
“I’m learning that working for our employees is better than them working for us. Servant leadership is not a new concept, but a rare one. It’s a great competitive advantage because while many talk about it, few practice it. ”
Kick Your Email Marketing up a Notch – says Clate Mask, CEO of Infusionsoft
“The #1 thing for small businesses to be more profitable in 2010 is to move beyond the current state of email marketing and start using email marketing 2.0. Email marketing 2.0 leverages prospect and customer behavior to ensure that you send targeted relevant messages every time. As more and more people adopt the web, and especially email marketing, as a way to grow their businesses, it becomes more and more important that every message entrepreneurs send is perfectly timed and relevant. Only email marketing 2.0 solutions that can track all customer behavior can do that.”
Focus on What Your Company Does Well – says Pamela Slim, author of “Escape from Cubicle Nation”
"Focus on the one or two things that your company does exceptionally well, and look for ways to do more of them. Instead of chasing after numerous opportunities and ever-increasing customers, see if you can deliver killer service to your true fans. You will feel more clear, focused and productive, and your profits will increase."
Sounds like an awesome set of pointers for a well-rounded approach to business. Here’s my own contribution:
Develop an Executive Dashboard – says yours truly (Anita Campbell)
“In 2010 develop and use an executive dashboard, with key metrics, so you can work ‘on’ your business instead of ‘in’ your business. Stepping back and examining your business through numbers will make you focus on problem areas, and find opportunities to improve. Some of the key metrics I am going to pay better attention to are: gross margin; customer acquisition (or in my case, reader acquisition) cost; cost of goods sold; and marketing expenses. A tool like MyBizHomepage.com, which helps business managers better “see” company QuickBooks data, plus some customized reports for my online operations, are what I plan to use.”
Here’s to increased profits all around in 2010!
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Anita Campbell is the Founder of Small Business Trends, an online community of small business owners.