Strategy to 'Shake Up' Your Profits and decrease costs (Part Two)

(2) Good systems and processes will help you minimise errors and make it a policy to learn from mistakes and improve your systems as you find ways to work smarter. It's a good idea to review your systems at least once a year to see where improvements can be made. Don't forget to seek the input of staff as well to make sure your systems and processes are the best tools for the job.

Get my help to ensure you're monitoring the right indicators for your business because staff tend to work towards t​hem even if they are critical for the business or not. Encourage senior staff to delegate simple tasks to more junior staff who could do just as well.

Strategies to decrease costs

• Decrease inventory - stock control is a good way to streamline your business​

• Decrease direct costs - make sure you have the right suppliers for your business and negotiate for better prices or discounts for buying in bulk

• Decrease indirect costs - for example, try to minimise waste and errors in your business by training staff, or reduce marketing costs by using low - cost marketing techniques

• Decrease overheads - for example, save energy wherever possible or try find a cheaper energy supply company

• Benchmark key financials - benchmarking your business helps you compare your costs (like rent and utilities etc.) to similar businesses in your industry to see if you are paying too much

Prioritise your strategies

Once you have chosen strategies to make your business more profitable, you should prioritise them in order of importance. It's a good idea to write down your goals and the corresponding strategies to achieve them, and also how you plan to implement your strategies.

Introduce counter-cyclical products

If you have a slow season, think about introducing counter-cyclical products or services to your core business to generate incremental profits and cash flow. One company that sells floor-based heating systems (with a traditional slow summer sales season), introduced a de-icing product that could be sold and installed during the summer. They added $80,000 to their bottom line in the first year of the new product.

Take action

A very wise person said that hope is not a strategy. Take action when needed. Don't let problems linger. If you made a buying mistake, don't hold on to the product. Take the hit and get it out the door so you can generate cash to buy or produce products that will sell.

Look around you

Find out what the leaders in your industry are doing. As long as they are not direct competitors, most are willing to share ideas. Join a peer group that shares numbers, not just war stories. I know many businesses that are alive and flourishing even in today's challenging times because of ideas and insights they gained from such groups.

Think outside the box

Look outside your industry for ideas. We all can learn lessons from how other industries and business models are going through these times. The New York Times has an excellent online series called, "How I Saved My Company" that features videos of business owners sharing how they got their companies through the recession.

Focus on your more profitable items

Your products or services with the highest gross profit margin are the most important to your business, as they generate more money. Once you have identified your most profitable items you should concentrate on achieving higher sales targets for them. This may require you to rethink aspects of your business or to devise strategies for improvement.

Consider using "The Business Minder" to help you shake things up! Available throughout Asia with offices in Bali Indonesia and Singapore. I am the original and only true expert business consulting and management service and Business Minder.