How to improve business profitability

Running a business is difficult because you have to think about everything from the work you’re doing, to your accounts, to your staff. Good organisation and a team of people you can trust is paramount to a profitable business.

Re-evaluate suppliers
If you’ve been with a supplier for a while then it might be worth renegotiating with them or looking elsewhere for a better deal. Prices go up and down, business models change and your needs may differ month-to-month too. It’s for this reason that there’s no point in sticking with one supplier just for convenience.
Look at what you need, what you’re getting and if there’s any wastage (especially important for anyone in the catering business). You should also look at price. Perhaps another supplier can do you a deal or maybe there’s a cheaper product better suited to your needs.
Suppliers in a lot of industries have a bit of room for movement when it comes to prices so give them a call and negotiate a deal, if they want to keep your custom, they’ll be willing to listen.
Regularly review staff
If you have staff working for you then it’s important to evaluate them on a regular basis. This might be something as simple as looking at how much they sell, their attendance or their profitability based on how much work they do, how much money the bring in and how much it costs you to employ them.
A more in depth option would be 360 feedback. Not only will this look at how your staff are performing from all angles but it’ll also give them valuable feedback that will help them to improve.
You’ll be able to look at your staff in terms of how they interact with colleagues, what your customers think of them and how you perceive their work. You’ll also be able to get an idea how they think their performing compared to the reality.
Measure return on investment on marketing activities
Marketing activities can really cut into your profits but without them, perhaps you wouldn’t be making as much profit, right? That’s not always the case, some marketing activities just don’t work for everyone and you really need to monitor how much money each activity brings in to make sure it’s worth it.
You can do this by conducting customer questionnaires to find out how they found you, by adding trackable links and codes to advertising and by offering special prices that will tell you where a customer has come from.
Doing this will tell you exactly how much money each marketing channel is bringing in. You can then compare this to how much you spend to see if it’s worth continuing to spend money in that area.
Once you have this information you can either decide to sink more money into a channel with a greater return on investment or you can spend that money elsewhere.