Small Business Owners: The Building Blocks for Increasing Profits

The fundamental building blocks of every business are Processes (procedures / policy), People (employees), Customers and Resources (ideas / capital). Leaders, who strengthen and understand each of these building blocks, build their business. Those who weaken or neglect these building blocks find themselves with declines in both their income and results.

Believe it or not, organizations can sometimes forget that their main goal is to create and deliver high-quality products and provide excellent services. Organizations keep ineffective processes in place because it is convenient, safe, and familiar. Leaders should set aside time regularly to define and redefine their processes, track defects and poor services, and make improvements to solidify these (5) major building blocks.

Owner mindset

You have to make the mind shift from running your business as a freelancer / good employee to building a business that you can one day sell, scale, or passively own to fund your retirement.

This means constantly reminding yourself that you are only a temporary producer and that your business must eventually replace you in your day-to-day operations.

Be clear on your mission

There’s a reason you started a business and quit your job (or didn’t try to find a new one). Why are you doing this? Keep in mind that your personal mission and the mission of your company may be different, as long as they are aligned and can coexist. You made the mission statement in the business plan and it’s on the shelf gathering dust.

Network and get a mentor

Get a business coach or advisor. It doesn’t have to be someone professional, just someone who can share experiences to brainstorm and tell you when you’re losing equipment, money, and mindset.

Get your business out of the way

When money is tight and momentum wears off, you’re left with the day-to-day work of the business – that’s when you learn how to make your business run. It can get complicated because sales are slow and you are learning how the business actually operates, to acquire customers, to market products, to understand how changing processes and products affect your finances, and every idea you have does not automatically work as you imagine it to grow. Benefits.

At some point, while running a business, you are likely to experience that feeling of exhaustion or lack of inspiration. Work-life balance is important; there is a truth in working hard and playing hard to relax. Reading a daily devotion and taking a 30-minute daily walk can help relax the mind, etc.

Customer

Customer acquisition is costly to acquire new customers, companies must effectively target, market and convince customers to try their product or service.

Many business owners don’t take the time to find out who their target customer is. What are the likes, dislikes, needs, and wants of your target customers? What type of media do they consume? What is the cheapest way to reach them? How much is the target customer willing to pay for your products or services? Where and how should we sell our products?

Remember, it is cheaper to keep a customer than to acquire new ones.

Master the art of commitment

Engagement is important in every part of your business, whether you communicate through email marketing, social media, blogging, video, and other business formats.

Grab the attention of social media

The social media marketing plan should include Instagram, Facebook, Twitter, and the company website to communicate with your customer. Use the same theme, images (banner pages) and similar products.

Understand the importance of business logos

It’s the first thing potential customers will notice about your brand, make sure it’s presentable, professional, and polished. Make sure the logo connects with the needs and wants of your customers.

Create an experience for your brand

Create a fun and informative environment to solve your customers’ problems.

The Right Customers Are More Important Than Most Customers

Most of the business strategy is to get the cash at the door by whatever means necessary to get the majority of customers through the door. The problem is, you accomplish all of this at the expense of quality, profit, and sanity. The right customers will allow your company to do a better job, build a better reputation, generate more profits, and retain better employees.

Focus on your goal, objectives, topic but above all on profitability

Don’t try to be everything to all clients. Specialize in solving your ‘target audience’ problems and have fun doing it. Even the largest companies go to great lengths when they focus on keeping the main thing first.

Operations

Processes

They are the actions and applications that executives and teams put in place to achieve the desired results.

Leaders must step back to review their processes, individually or in cross-functional groups, to eliminate inefficiencies and optimize performance, annually or as the market changes.

Systems

Systems are the trusted processes and procedures that enable your business to consistently produce excellent results for your customer and profitability for you.

Documenting automated processes can increase your business efficiency and reduce costly errors; the checklists your employees follow to make sure all orders are shipped correctly; the orientation process for all new clients when they start working together; and the standardized contracts you use with all your new hires and vendors.

Controls / Standards

Controls are the processes, procedures, and safeguards that protect your company from misinformed or inappropriate decisions or actions by any team member. They are also your company’s way of ensuring key work is done on time and in the right way.

There are (4) main types of business controls:

  1. Checklists / Visual Business Process Controls

  2. Dashboards / Business Performance Measures Metrics by Function (KPI)

  3. Integrated internal quality controls — product / process quality controls

  4. Policy and Procedures — Written / Measured

Scalable solutions

The systems (using Excel and Quickbooks), Processes and Procedures that worked for a $ 1 million a year business are not enough for a $ 10 million dollar business or a $ 25 million dollar business.

Scaling your business requires building it in such a way that your business model and systems can be implemented and replicated on a much broader playing field, based on higher volume of product order / process sales.

For example, the choice of a database solution or third-party fulfillment should be based on actual growth rates, not on potential or anticipated projected sales.

Finance

Cash flow and financial statements are your “lifeline.”

  • Learn how you are making and losing money. Understand the profit and loss statements and the processes and procedures that relate to improving the ‘profits’ of your business.

Means

The financial resources of the company, plus the measurement tools necessary to manage and track finances and assets. Do you have the knowledge, skills, and abilities to use these tools to increase your profits?

Small and medium-sized businesses must master the ability to manage their working capital and cash flow. All companies have access to profit and loss, balance sheet, and cash flow statements. The administration is using accounting software or someone is preparing the reports for the administration.

How well does top management understand the finances of the company and its correlation with its strategy? Do these managers understand which parts of the business need investment, where cuts can be made, and why?

Managers must take the time to learn the relationships and interdependencies between their tools and the reports they use to maximize their resources.

Teamwork makes DreamWorks

You cannot do it alone. It is essential to ensure that your company does not depend on the presence of a single person.

Even Steve Jobs and Bill Gates needed a great team to help them execute, deliver, and do everything behind the scenes to deliver their vision to clients.

Surround yourself with the best people you can find. Hire people who are smarter than you, then step back and let them do their job. Remember that championships are won by teams, not athletes. Employees are hired either to increase revenue or to reduce expenses in order to improve profits, for no other reason.

People

People are not your greatest asset; the right people are. The wrong people are your biggest catastrophe. Mediocre people are your biggest waste of resources.

Leaders must live to create learning organizations where the organization is always pushing for improvement. An organization where employees feel valued and are contributing according to their capabilities.

Effective management will create an organization in which personal growth is expected and rewarded and employees are challenged and satisfied.

Employees motivated by the vision and mission of the company will produce profitability, but frustrated employees will generate losses.

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