Amid the COVID-19 pandemic, many businesses aren’t thriving as they once were Yet this challenging time is an opportunity to re-evaluate your company’s processes and see where you can make savings, cut the waste and improve your business numbers.
In this blog, Manuel Campos, CEO of Celebrity Ink™, shares some of his best tips to enhance your business so it runs more smoothly and turns over a larger profit.
Conduct a waste audit
Many businesses waste money without even realising it, and one of the quickest ways to cut costs is to examine where you don’t really need to be spending money.
“This is about where you are wasting cash within your financials to clean up the areas of the business,” he explains. “This will make sure your business is running more efficiently.”
Some of the most common areas a business can waste money include:
- Untargeted marketing
- Needless outsourcing
- Underused technology
- Over-hiring of staff
- Business loans that don’t lead to growth
- Unused business items
- Unused subscriptions
If you aren’t already, make sure your business is tracking its expenses to see where you are wasting cash so you can cut down on needless spending.
Even if you can’t cut spending completely, perhaps you can freeze some costs for a while until the business is more profitable.
Look at your productivity
When a business isn’t running efficiently, it can often affect the profit margin. Improve your systems and processes and your company will run better and produce higher sales.
To do this, it’s best to start by looking at automation, CRM (Customer Relationship Management) and sales funnels.
Some questions to ask include:
- How can you automate systems so they run quicker?
- Are you reaching out to your customers as well as you should be, and building strong relationships?
- Are your sales funnel properly targeted?
By improving these systems and processes so you are running your business like a tight ship, there won’t be any wastage and productivity will improve.
Analyse the data
Businesses often look at their sales when they analyse their business data, but don’t take into account other numbers.
“Don’t look simply at the sales – look beyond this. Make sure you are always examining your key performance indicators closely,” Manuel says.
“I call these KPIs my ‘Bali numbers’ – what are the four to five numbers within your business that you should know by heart while you’re lying on a beach in Bali.”
Manuel says these numbers should include your return on capital.
“A $1 million return is either good or bad depending on how much you’ve outlaid to achieve that result. For example, if it was just $100,000 spent to make $1 million, then that’s a great result. But if you spent $10 million and only got $1 million back then you need to go back to the drawing board.”
It’s important to make as many expenses as you can variable rather than fixed, so you have more flexibility in the running of your business.
Don’t forget to invest
Manuel says the businesses that will do better post-COVID will be the ones that still managed to invest when times were tough.
“If a business is able to cut their waste then they might have extra cash lying around to spend on investing. And these businesses will come out a lot stronger, post-COVID, than those who put investing on the backburner,” he says.
It’s also a good idea to build different income streams into your business model so you can monopolise on different ways to make money. This means when times are difficult and your business takes a hit, you are less likely to lose all income streams in one go.
“Variable income streams mean that if you are forced to face a physical shutdown then you still have money coming in from other channels,” Manuel says.
Businesses are often so busy dealing with the day-to-day that sometimes it is difficult to look ahead and plan for the future. During the quieter periods that COVID-19 has brought to many brands worldwide, it might be the perfect time to step back and think about how you can improve processes cut wasted spend.
Moving ahead with a strong vision and plan in mind can separate the successful businesses from those that fail. With 47% growth since pre-COVID sales, Celebrity Ink™ offers a great franchise opportunity for those wanting to run their own business. Talk to our HQ team.