5 Profits Tips in 2010 from me – but what about yours?

What went well in 2009?  What didn’t do so well?   Every year I do this – I review the strategies that worked for me in business – looking for the ones that gave me measurable, real results.  You can do the same.

It’s easy and doing a simple review of what worked what didn’t – of your whole business but especially your sales and marketing – can stop you from being distracted by the wrong things.

Now is the time to apply what worked, tweak the nearly and dump the complete failures.  You’ll probably find just like me that 80% of the results came from 20% of the effort…  which 20% suddenly becomes very important.

I reviewed Vivavi’s marketing this week.  Here, in no particular order, are five Profit Tips based off the results we’ve seen in my own business AND my clients in 2009 that we’ll be doing more of in 2010.  My suggestion is you look at these for your business too!

1.     Strategic Alliances / Joint Ventures / Host Beneficiary

You could call this your affiliate program, but joint ventures go further than just your affiliate program. You can use a joint venture to create products, share free interviews, generate leads or drive traffic to your websites. You can even partner to build a business together (for example a content writer and a designer or copywriter working together).
The best source of leads I’ve seen for making sales for me in 2009 came from comes from other people’s promotions of my products – as a value add to their product or service – a host (them) beneficiary (me). This means I need to concentrate more attention on partnerships and promotions.  Here’s my summary for you: Co-operations between businesses / individuals that create benefit for both.

2.     Ask Your Suppliers for More

Write to your product suppliers and get then to tell you what they can do to help.  Tell them how your business is doing and what you want to focus on.  Ask them what they can do to help.  Give them some suggestions – so yes ask for a better price / discount but more – suggest how they can do this to help you.  Maybe there is more of your stock they can provide, maybe discounts for early payment or money back when you hit a certain volume?  At least they should be looking to help you out with marketing material, promotions and samples

3.     Focus on outsourcing routine activities.

Outsourcing – it can look expensive or cheap but what might it really cost.  You can end up with MORE work if you don’t ensure you have a good process and clear measures when you’re outsourcing.  Spend too little and you may well end up duplicating the effort re-doing the substandard work or even paying fines!

I’ve seen several business owners who used to produce a high quality product / service lose ground with me and my business by now producing product that are ‘just ok and nothing more’ (or worse) through outsourcing.

You definitely need to have a well established process for them to utilise and strong meaningful measures to ensure they are delivering the quality you expect.  If you don’t then you’ve reduced your options to either paying for the very best (costly and not always any better at delivering consistently) or pot luck.

4.     Find the TRUE Margins

Before we can improve it we need to know what it measures right now.  Even better is to know your margins by product or product type or department or service. 

If you have difficulty in doing these measurements talk to your accountant / book keeper or if you have one, your financial controller.

Your way of measuring needs to reflect your business need / type.  In a service industry you might have a cross the board margin – which is the easiest approach or you make want to measure it by the type of service you provide, e.g. print design vs web design.  If you hold stock it might be possible to adopt your stock sheets to track margins.

If you or your book keeper are using some form of financial accounting software such as Sage or MS Accounts – you may have a version that can help you do this – if your software is more advanced or industry specific it almost certainly will.  Print off the report and take a good look in as much detail as possible.

Here’s an interesting fact… most people just by going through this exercise uncover something that looks odd or just not right or simply too low – correcting these often leads to money straight into your profit account.

5.     Sell more big margin products or services

Many times I’ve found that a low price item will have higher margin.  Look at every item where possible, and look to sell more of the higher margin stock and stock less of the low margin stock.  Service industry companies need to look at what makes the most money for the least amount of effort. 

Key points:

• Know your margins, your exact margins on everything you sell / do.
• Always move your customers focus to products and services that are high margin
• Services – your time is your money so only offer services that have high margins – in fact look at what you are doing in the business and ask yourself if it is what you should be doing

So there’s 5 of my tips – use them but go and review your business NOW!

Regards

Peter