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In today’s economy, making a profit is tough and maintaining profit is even harder, but doubling and tripling it is a whole other ball game.
We know it’s not all about the money, but without money you cannot realise any of the dreams that you have for your business.
We have managed to more than triple our bottom line profit from the previous period within the first half of this year. Our team is now applying the keys and practices that enabled this growth to our clients’ companies with similar success.
Here are five of the most important keys to grow your bottom line:
Focus on a specialised niche
People are willing to pay more for specialised skills than for general skills. Make sure that you select a profitable niche and that you are an absolute expert in that area of business that you work in. Know your market and your focus area within the market. Be at the cutting edge of trends and technology within your niche and make sure that you have what it takes to serve them well.
It’s a hard process of cost-cutting that is required to grow profit if your top line is not growing. Growing profit is a lot more achievable when revenue growth is high. Establishing yourself as thought leader in your industry goes a long way towards building your brand and ensuring that new business seeks you out.
Make sure that the differentiating factors of your offering have some superiority over that of the competition, and that this fact is made visible. Your brand must command eminence. Being seen in such a light drastically changes what foot you start on when negotiating with a new client as well. Drive new business to fuel top line growth through an established, visible brand.
Once you are established within your industry and you are seen as a leader in your niche, work should be flowing in. Now the secret is to not be overwhelmed. Biting off more than you can chew could lead to non-delivery on those big promises that you and your brand have made. Delivery as promised will be required to turn once-off projects into long term, retainer clients.
Working harder and longer is not sustainable. New staff cannot always be found, trained and equipped fast enough. What you need are systems. Some work will always require your personal touch, but a large portion of work and business processes can be automated.
Yes, material hours will go into developing systems and processes, and these hours are not billable, but these sacrifices ensure that you can handle volume as your business scales. Good systems ensure that nothing falls through the cracks and that your delivery is on time and up to standard. Over time, it also enables you to perform tasks faster, which increase profit margins.
Cash flow management
The age old concept that cash flow is king applies and managing cash in and cash out effectively is a big challenge. When sales are soaring and new contracts are coming in, careful planning is needed to ensure that short-term obligations can be met.
Accounting profit is not cash flow profit and ignorance on this topic could cost a fast-growing company the ultimate price. Be sure to build enough detail into your cash flow model to be able to effectively plan and manage the lifeblood of the business.
Expand revenue streams and profit centres
Once work-flow is automated and cash flows are being controlled well, your success should be reflected in your bottom line. The final step is to diversify your streams of revenue. Explore various other avenues of revenue generation within your area of expertise and within your niche.
For each new revenue stream, follow the same process of establishing eminence, engineering automation and monitoring and managing of cash flows. You already have the recipe — now rinse and repeat.
Applying these learnings to your business with persistence will ensure an uptick in profit. Patiently think them over and incorporate them in your business to ensure that critical bottom line success.
Image by Andy via Flickr