80% of UK companies do not live to see their second birthday. While there are a host of reasons why many businesses fail, an unsustainable business model will see you closing shop faster than anything else. In simple terms, if you are barely breaking even, your business may not have long to live. Well, unless you do something about it. So how do you improve your bottom line? The following are five things to do to get you there.
1. Hire the Right People
Employees are the most important asset in a business. Unfortunately, not every person who brandishes an impressive CV will bring value to the organization. One of the most direct consequences of a bad hire is decreased productivity.
If they are a bad fit for the role, they will most likely spend more time than necessary on routine tasks. Such employees are also likely not to bring much to the table in terms of innovation, ingenuity and creativity.
And it doesn’t end there. Such employees can lower the morale of other workers, further decreasing productivity and the quality of the output. If they are in an employee-facing role, inappropriate hires can also damage your reputation losing you valuable business.
Unfortunately, many entrepreneurs continue to make the costly mistake of hiring the wrong people, which hurts their businesses. To make it worse, replacing the employee will set you back £11,000.
The best advice to improve your bottom line is that you should only hire the right people.
2. Improve Your Skills
At the end of the day, it all boils down to how good you are at running the business. Sometimes, business owners find themselves having to wear many hats, especially when the business is young. You may find yourself being a manager, HR, accountant and technician.
While this can stretch you thin, you must be really good at what you do. This is because once you open your doors, you start competing with businesses which possibly have fully-fledged departments. But that’s not the only reason why you should up your game, people who have the right skills are better placed to identify opportunities for growth, improvement or efficiency.
Luckily, there are lots of helpful skills you can pick up without much hassle. For example, you can complete online CPD courses without having to commute to a physical classroom. The idea is to equip yourself with skills that will help you to make better business decisions and mprove your bottom line.
3. Cut the Costs
To increase your profits, one of the things you need to do is to minimize your expenses. This sounds like basic knowledge, but many business people continue to incur unnecessary expenditure.
Talk about things as trivial as not switching off the lights when leaving the room or turning on the AC even when it is not necessary. Even though these do not sound like things you need to worry about, the seemingly meagre bills add up and become substantial.
But the things that have a bigger impact could require more drastic actions. For example, if you have a large unutilized floor space, you may consider moving to a smaller premises to reduce the cost of rent. You may also want to negotiate better interest terms with your lender if you have a great credit score.
Many business owners also realize that SBA loans are friendlier than conventional bank loans.
4. Learn How to Delegate
You might be tempted to want to do everything yourself, but this cannot get you very far. You will most likely end up stressed, swamped and overwhelmed.
When you have a lot on your hands, you will have little time to focus on the more important things that only you can handle. These include exploring new opportunities and strategic planning.
Delegation is also important because it empowers your team. If employees feel trusted, they are likely to be motivated and to want to do their very best. This is likely to increase output. Again, when you allow the right people to handle tasks that are most suited for them, you can brace yourself for increased efficiency.
5. Find a Mentor
Do not be shy to ask for a helping hand. Finding a mentor can help you avoid common business mistakes and open your eyes to opportunities you may not be aware of.
To find the right mentor, look around for successful people in your line of business and build connections with them. When they become acquaintances, you can then broach the subject of mentorship. You will be surprised that many people will be willing to help.
Take the Right Approach
Every entrepreneur is interested in making their venture profitable. Unfortunately, if you take the wrong approach, you will not make any headway. The good thing is that it is not as difficult as it might seem to improve your bottom line. Be guided by the above pointers, and you could give your business a turnaround.