We kicked off our #WaypointThinks event series last week with a topic that’s close to every business owners heart (and pocket), profitability.
As a take-away we offered 5 top tips to kickstart better profits in your business. If you’d like to know more, please get in touch.
- Ownership & accountability – make profit a deliberate plan, not just a consequence of doing work. Make it a management objective to drive more profit and have your senior team own different aspects of it (client services, finance, operations etc). Only through shared ownership will you reap the benefits.
- Change the culture – start influencing small changes in the culture so that your team understands how profit is made and what the levers are to influence it. Don’t make profit a dirty word, but instead champion what higher profits can bring (e.g. more investment, better working conditions, more staff etc).
- Understand your business model – business strategy and services evolve over time but there’s usually a lag (sometimes a long one) in making changes to the back end so that the operating model matches who you are and what you’re selling. If you’re not optimally set up for what you are selling then profits will suffer.
- Refine, refine, refine – if you measure the right data it will inform you of where your business is sub-optimal. Regularly review this data and see what if tells you, look for patterns in your KPIs. Share information and create awareness of your reality and share it widely.
- Profitable clients – make sure that clients are profitable from when you first take them on. Don’t believe you can make them profitable, it’s really hard. Do not negotiate with yourselves before you approach your client and consider the costs of the pitch when measuring project profitability: it may not be worth it.