How to Boost Your Profits

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StrategyDriven Managing Your Finances ArticleAmerica is built on the spirit of entrepreneurship. There are over 28 million small businesses nationwide, and a further 22 million that are solely operated. That’s a large number of businesses that contribute to the country’s economy. However, the number of businesses that fail within the first four years is a significant 50%, and out of the survivors, only a third will reach a decade.

Running your own business is a challenge no matter what industry you are in or the products and services that you provide, and there is no singular reason for these failure rates.

Common Reasons for Business Failure

Failing to plan

For your business to be a success, you need to make both short and long-term plans. You need to identify your goals and define objectives that will help you reach them, from the next few months through to the following years. Your goals will shape every business decision you make and give you direction. They need to be quantifiable so that you can assess how successful the actions that you take are. This is important; how will you know what is working and what isn’t if you have nothing to measure?

Ignoring customer needs

The customer is always right. That’s a correct statement, surely. Not always, but it has you relate to your customers that will affect the success of your business. In the digital age that we live in, there has never been a better time to truly understand your customers’ and clients’ needs and wants. Always keep an eye on what your customers want and tell you about your business; their perception of your business may be very different from what you intend. They are fickle, and your business needs to be able to respond to emerging trends, feedback and correspondence. It requires flexibility and patience, but if you not only listen but hear to what your customers say, you will reap the rewards.

Lack of profit

Lack of profit is very different to lack of revenue. Your business turnover may be high, but that does not mean that it is a profitable business. For your business to grow, the profit needs to flow. There are several reasons for a lack of profit: poor management decisions, cash flow problems and premature scaling; all can be related back to a failure for adequate planning. Only 40% of small businesses are profitable – the others either break even or lose money. If your business is not making a profit, you need to assess every aspect of your business so that you can identify why you are not.

How to Boost Your Business Profits

The quandary you have is how to generate more sales while reducing your expenditure. While your current efforts have been successful to some extent, you must maximize the opportunity to turn a profit.

Modify your strategy

You need to implement a new strategy to do this. Research online about how other successful businesses in your niche have succeeded. The chances are high that they have switched to a more relationship-based model that uses technology to improve their customer experience and loyalty. Here is an example of how this change in strategy has been used to grow a law form, check it out.

Increase the product selection

To increase sales, identify which products you can cross-sell to existing clients and customers. You already know that they are interested in your niche, but are there other relating products that your customers will buy from elsewhere? An example of this is for a yoga clothing company to sell yoga mats. The key to making this cross-selling strategy work is to comprehensively understand who your current and target customers are. Know what they want and what they need. You can incentivize your customers to buy more from you by offering bundles and discounts.

Review operational procedures

There will always be aspects of your operational functions that can be improved upon. The Japanese word ‘kaizen’ translates as improvement, and is the name given to a strategy that works on the principle that all employees work together to improve process incrementally. Kaizen is a valuable mindset to adopt and can dramatically reduce waste and improve a business’s profitability. It is imperative that you get all staff members on board and seek their feedback on how to improve your business’s function.

For example, a sub-total column on an invoice can help speed up the efficiency of your accounts department; introducing cloud-based technology so that your teams can collaborate easier, or even something as simple as moving the printer’s location to be nearer to the receptionist can help to make working more efficient. Kaizen is not a one-off experience, consistently aim to improve efficiency. Ask your employees for their recommendations and act upon the information that they give you.

Regularly review expenditure

You may just have been focusing on the income and profit columns of your account reports; however, you need to pay equal attention to your costs. Businesses evolve over time, and so you need to make sure that your regular outgoings are still relevant to your business today, and not based on historical data.

Review your running costs and identify areas that you could save money. Rolling contracts are a great way of controlling cash flow as you know how much money is leaving your account and when, but they can also make you complacent to other deals that are currently up for grabs and can save you money.

Are there routine tasks that you can outsource? Or, would it be more cost-effective to hire someone on a part-time or freelance basis to complete jobs that you currently pay for a full-time member of staff or do yourself? Outsourcing can be a great solution to boosting efficiency and profits; you only pay for the project that you need completing.

You should also review your suppliers. There may be better market deals that you can access that may not have been available when you started out. It can be risky, as there is potential to damage the relationship you have with your current supplier, but it is worth opening the conversation up, just tread carefully.

While it can seem daunting to undertake such a thorough review of your business, it is critical for your business to be a success. You need to adjust your business to the changing times and embrace technology to help your customer’s user experience and increase the efficiency of your organization.

8 Leading Areas for Change In Risk Management/Analysis In The Coming Years

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StrategyDriven Risk Management Article |Risk Management|Risk Management and Where It Could Go In a Foreseeable FutureBottom-line performance is a vital aspect of any business. Managers and people in higher positions, in general, are always looking for ways to improve bottom-line operations and minimize the risks. Risk management helps them stay on top of the market challenges and trends in the relevant industry.

However, markets and industries are dynamic concepts. To answer the latest challenges, risk analysis has to be active as well.

More Precise Risk Models

Predominantly relying on the human workforce makes risk models way too complicated. Risk management cannot be efficiently applied to risk models that have too many factors to account for. It’s one of the most significant areas for change in risk analysis in the coming years.

To assess the risk, companies will be advised to simplify the risk models and thus help themselves. With simpler risk models assessing risks and delivering relevant strategies to mitigate them will become significantly more comfortable than today.

Some of the strategies we will see are process automation and streamlined communication, both internally and externally.

Digitization

Risk management, as we know, it will definitely change in the coming years. Scanning is an ongoing process most businesses are exposed to. Some of them directly, others indirectly. Anyhow, the digitization itself offers away too many benefits for companies to leave it behind because it brings new risks.

The digital era has also brought to light new business models facing brand new risks, which makes digitization a leading area for change in risk analysis. People in the risk management industry will have to identify these emerging and evolving risk types and integrate them into the existing risk models.

Interconnectedness and Collective Risk Management

Businesses across the world have become an integral part of the networked economy. Interconnectedness comes with a great many benefits – quickly penetrating new markets and growing customer base, being just a few of them. Meanwhile, supply chains have become more complex.

Businesses actively engage on different levels with different external stakeholders. All of this, at the same time, creates a network of risks. Market risk analysis slowly shifts toward a joint effort.

All businesses in this network will have to rely on their partners that they can identify, manage, and reduce risks. It will definitely change risk management in the days to come.

StrategyDriven Risk Management Article |Risk Management|Risk Management and Where It Could Go In a Foreseeable FutureRisk Management in Real-Time

The digitization and interconnectedness allow for new risks that some organizations don’t have experience with. All this calls for a pervasive approach to risk management.

Being able to assess and minimize the risks in-house and outside will become a leading practice in many industries. It will push risk analysis toward the use of technology and software solutions.

How will the risk assessment field answer to these new challenges? One of the possible answers is pursuing opportunities to monitor and manage risk in real-time. The technology is already here. There are different types of sensors and tracking and monitoring solutions that can help streamline manage risks and mitigate it before there is a need for damage control.

Risk Transfer Instruments

The most common risk transfer instruments are contracts and insurance. They are widely used across verticals to cushion the blow of unforeseen circumstances and allow businesses to continue their operations. Two main factors driving change in risk analysis are financial institutions and risk events with potentially the most significant impact on business.

The financial industry is always working on coming up with new financial instruments to help businesses monetize and transfer risk. It will be a great challenge to assess whether or not to invest in these instruments.

On the other hand, risk events that could potentially have a high impact on operations are imminent. The climate change, cyberattacks, and the global pandemic are just a couple of them.

StrategyDriven Risk Management Article |Risk Management|Risk Management and Where It Could Go In a Foreseeable FutureFeasible Level of Risk-Taking

Markets are becoming saturated and more volatile as we speak. The competition is harsh out there, and that creates a frame of reference in which businesses can do little without intentionally taking risks. At the same time, deliberately taking risks drives change in risk analysis.

Finding new ways to accurately identify, assess, and measure risks are becoming more important as we speak. Organizations will turn to calculate the accurate upside value for a chance to be able to decide whether it is feasible to continue operations while taking risks intentionally.

Enabling sustainable risk-taking is potentially the area that’s going to change the risk analysis the most. Managing risk will start drifting away from only identifying the risks that have to be avoided towards taking risks to drive value, performance, and productivity.

AI To Help Human-led Risk Management

AI, machine learning, and big data are driving changes across verticals. Risk analysis is not an exception. The formulas, knowledge, and experience risk managers leverage to stay on top of managing risks are simply not enough. The landscape has become way too dynamic to identify and assess all the risks.

The technologies mentioned above will help businesses extend their market risk analysis practices and make them error-free. Smart tools can detect, predict, and prevent risks the very moment they become a real threat. The best thing about it is that these are fully autonomous systems capable of self-managing risks entirely on their own.

Risk Insights and Behavioral Science

The human factor is a crucial piece for solving the risk puzzle. Risky behavior is the subject of many new studies in the fields of social, psychology, neuroscience, and cognitive sciences. The findings can’t be ignored. Thanks to the systematic approach, the studies have identified the factors and personality traits correlated with risky behavior.

The results of these studies are already changing the risk analysis landscape. We can already see some organizations having a Chief Behavioral Officer on the payroll. At this point, it’s safe to assume that the results of these studies are going to drive at least some new changes in risk management practices.

To answer the new threats, risk management will have to move closer to a model based on proactive, real-time, and technology-powered practices. These eight areas have the most impact on market risk analysis and risk management, in general, and will most definitely change it in the coming years.

About the Author

StrategyDriven Expert Contributor | Gracie MyersGracie Myers is a content writer at Research Optimus. She enjoys writing on various topics mainly associated with Research. Her famous articles are on the topic of Business Research, Market Research, Business Analytics and many more.

5 Ways to Improve Your Dental Clinic

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StrategyDriven Managing Your Business Article |Dental Clinic|5 Ways to Improve Your Dental ClinicThere’s a lot of potential when it comes to running a dental clinic. After all, people will always want to look after their teeth, and that means that the dental industry is one of the most future-proof and robust industries out there. However, it’s not as if success will automatically come your way. There will be competition, and that means that you have to ensure that you’re delivering the best level of service that you can. If you’re looking for some ways to improve your dental practice, then take a look at some of the useful tips that we’ve outlined below.

Serve the Community

All dentists are offering the same essential services, but how they offer it will be dependent on where they’re located. If you’re looking to improve your dental practice, then the first place you should look is at your community. Who are the people living there, and what do they need? The answer will be one thing if you live in an area populated by young families, another if it’s a student-heavy area. Possible ways to serve them include extending your opening hours, offering at-home services and expanding the product range to suit their needs.  If your customers are looking for EZ Smile aligners, then provide it for them.

Invest in Your Staff

A dental practice can only be as good as the staff that are working there. For that reason, it’s essential that you’re bringing the right kind of staff on board. This isn’t one of those things where you can cut corners and try to save money. If you bring the best talent to your dental clinic, then you’ll notice a difference. Note that this doesn’t just apply to dentists, but all the positions in your clinic. If you’ve assembled a fantastic team, then you’ll find that everything runs much smoother, patients are happier, and so on.

Get the Right Systems

We’ve come a long way in recent years, and today there are plenty of systems that you can integrate into your clinic that will help to push things in the right direction. They’ll save time, make your clinic more consistent, and all-around help your team to work better. There’s any number of software and services that can help. There are databases that can provide a safety data sheet for dental office, software that’ll help streamline your appointment process, and so on. Have a look at any current problems that you have, and there’ll surely be a solution available to help you.

The Dental Look

While the success of your dental practice will ultimately come down to the strength of your treatments and services, keep in mind that the overall look of your clinic is also important. It’ll help to make your space look more professional, and can go a long way when it comes to building trust with patients. If your site is looking a little worse for wear, then look at giving it an update.

New Treatments

Finally, be sure to stay on top of new treatments that are available. If you’re always on the cutting edge of trends, then your patients will have no reason to look elsewhere.

BUILD AN A-TEAM: Introduction, Being the Kind of Boss People Love to Work For

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StrategyDriven Management and Leadership Article | BUILD AN A-TEAM: Introduction, Being the Kind of Boss People Love to Work ForIn San Diego, California, in 1953, a new startup set its sights on the Space Age. The Rocket Chemical Company had a small lab and just three people, but they could see a major opportunity in front of them. The aerospace industry was producing incredible new technology – missiles and rockets that could fly farther than any had before – but that technology had a major weakness: it was all made of metal, and metal rusts.

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Reprinted by permission of Harvard Business Review Press. Excerpted from Build an A-Team: Play to Their Strengths and Lead Them Up the Learning Curve by Whitney Johnson. Copyright 2018 Whitney Johnson. All rights reserved.

About the Author
StrategyDriven Expert Contributor | Whitney JohnsonWhitney Johnson is the CEO of WLJ Advisors and one of the 50 leading business thinkers in the world as named by Thinkers50. She is an expert on helping high-growth organizations develop high-growth individuals.

Photo credit: Macy Robison

Notes

  1. “WD-40CompanyHistory,”FundingUniverse,accessed November 17, 2017, http://www.fundinguniverse.com/company-histories/wd-40-company-history/.
  2. LarryEmond,“2ReasonsWhyEmployeeEngagement Programs Fall Short,” Gallup News, August 15, 2007, http://news.gallup.com/opinion/gallup/216155/reasons-why-employee-engagement-programs-fall-short.aspx.
  3. Whitney Johnson, interview with Garry Ridge, Disrupt Yourself podcast, episode 13, March 10, 2017, https://soundcloud.com/disruptyourselfpodcast/episode-13-garry-ridge.
  4. Ibid.

First I Launched My Company And Then I Had To Start Learning About Managing A Product.

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StrategyDriven Entrepreneurship Article | First I Launched My Company And Then I Had To Start Learning About Managing A Product.To some degree, I always knew I’d launch my own business. I just didn’t know which field of study the company would rest in. So after spending much of my 20s working in finance and real estate, and then going to business school, the right opportunity sat in front of me. In 2011, I formed SquareFoot, a new kind of commercial real estate company, to address growing companies and their office space needs.

We spent those early years building our website and fleshing out our marketing and messaging to reel in clients who suited our solutions. For a few years, this process worked well for us, and I took it on my own shoulders to grow in my knowledge first and then my role and leadership to include more. As I managed the real estate component of the company, and pinch-hitted adequately on the marketing front, too, I came to realize that I wouldn’t be able to carry the team in one crucial element: product.

My thinking on this was simple – There were three areas of the business that needed to be top-notch for us to succeed: 1. Real estate, 2. Marketing, and 3. Product. I could handle the top two, but not the last one. Not if I wanted the company to deliver on the vision I had. So I set out to hire a COO who could. I needed someone with complementary skills to mine, to fill in the gaps and to lead the other half of the organization. That person’s background would be, ideally, the inverse of mine, someone who was strong on product, could assist with marketing, and likely wouldn’t know the first thing (at that point) about negotiating real estate deals.

Over the past 3.5 years, I have been a stakeholder in the success of our product management, not the leader. And both the organization and our clients are better off because of it. I sit in on meetings where our COO and the rest of the team outline how and why to build out the product offering to give our clients more and better tools. This is an ongoing area of growth for me. Much of the interactions we have with clients are in-person, which falls into the real estate category of our negotiations and communications, but we must also have a high-quality website and app to match the promises and commitments we’ve made. I know we’re in good hands.

Some CEOs are product-first front their experience, skillset, and interests. They have a leg up on people like me who are catching up as they go when it comes to product, and depend on others more able than them to lead that portion of the business. But, I’d argue, nobody has done it all, or can do it all. For the product-oriented founders, they’ll need to eventually hire a business-oriented executive to help them build and grow for the future. What’s most important in these thought processes and conversations is to be honest and upfront about your own limitations and how those may be standing in the way of valuable progress or long-term success.

Since every company is different in makeup, there’s no definitive time to expand the executive team. You know it’s the right time, in my experience, when you feel in over your head again. As discussions internally began to mount among junior team members looking to me to make the ultimate decision, I was comfortable and confident in the real estate and marketing areas far more than I was when it came to product. It reached a point where I had to acknowledge and accept that I would eventually make a bad misstep if I didn’t turn to someone who was more capable of handling those situations and circumstances. That’s not a sign of weakness for a CEO, it’s a show of maturity. As SquareFoot grew in employee count and in client base, I had to grow in my leadership, too. Bringing on my counterpart then helped accelerate that growth overall across all metrics.

The advice I’d give to CEOs first starting out is to try to manage it all for as long as you can. But also be realistic and honest about when that style ceases to work. These are good problems to have, as it means you’ve tackled and conquered many layers of company growth to reach the point where you can no longer scale yourself to cover it all. Bringing on someone at that time is a smart move. Finding the person best suited to balance out your weaknesses with their strengths is the best path toward reaching what you set out to do and continue to seek. For me, that was understanding that product wasn’t something I could pinch-hit on. Once I turned to an expert, I haven’t had reason to look back.

About the Author

StrategyDriven Expert Contributor | Jonathan WasserstrumJonathan Wasserstrum is the Founder / CEO of SquareFoot a commercial real estate platform based in New York City. Founded in 2011, Squarefoot helps companies find their next (and next) office space.