For a business owner, sales along with profit is the true indicator of success. Though increasing sales is essential to earning a profit, if not done properly and carefully, it can reduce profit margin resulting in a loss. A profit margin not only tells you whether you are making money but also indicates if your products are priced properly. Also, profit is a measure that should improve continuously, here are some of the ways to increase profits in your business.
- Better Inventory Management: Efficient inventory management by knowing what is available through product information, what is fast selling and what is slow will enable in better decision making around sales, purchase, and marketing. It also effectively reduces the need for markdown prices as it can substantially affect the profits in a business.
- Reduce Operating Costs: Wasteful expenditure should be reduced which lowers the overhead costs. You can use cost-effective supplies which are of good quality to cut costs. Automating tasks reduces the time, manpower and also cost. Streamline all the operations, remove excess staff and spend more energy on the customer needs.
- Increase Brand Value: That can be done by creating an emotional connection with your customers. Focus on the value the product offers to the customer’s lifestyle and emotional values. Communicate how the product can elevate the lifestyle of a customer or show how people feel great after using your merchandise. Getting first hand feedback is the best advertisement that you can get for your brand.
- Increase the Size of the Order/ Frequency: To increase the size of the order, it is essential to cross-sell and upsell. Look for ways to increase the purchase frequency and that will improve the sales and also the profits.
- Raise the Prices: Increase the price of the product will ensure you earn more money from each sale and also increase the profit margin. But that can be done only after researching the price offered by competitors, the psychology of the customer and the economy, else there is a high probability of losing customers. It is recommended that the price hike should start from the best sellers.
- Offer Smart Discounts: Offering discounts have an impact on your profits but you if you must do it, you have to smartly implement it. You can consider giving personalized offers that are also customized. Figure out what it is the best discount to offer to acquire customers instead of giving a giant discount and take a hit on profits. Use customer purchase history to provide personalized offers thereby increasing your profit margin.
- Improve Relationships with the Vendor: Working in collaboration with vendors and engaging in business planning jointly is a good way to improve profits. Look for ways to reduce inefficiencies in your supply-chain.
- Change your Purchasing Practice: Look for ways to cuts costs with suppliers by asking for discounts or offers from vendors especially when you are providing bulk orders. Find out the actual final cost after including all the fee and figure out the need for this spending. Another way to ask for more discounts is to buy along with other store owners so that you get more bargaining power.
Use these easy ways to increase the profits of your business and make a difference to the society!
B2B plays a big role in our economy, but how can it contribute to our recovery?
By Richard Parsons from True, creative B2B marketing agency, discusses the current state of marketing and looks ahead to what the future might bring.
The average consumer will likely be unaware that more than half of the companies listed on the FTSE 350 operate purely in B2B transactions. Not only that, but 50% of our economy is generated by B2B transactions and 82% of companies derive some or all of their income from B2B. There is also a global B2B trade surplus, unlike in B2C. The significant conAltribution of B2B is routinely missed but could hold the key to economic recovery.
The famous essay “I, Pencil” by Leonard E. Read, founder of the Foundation for Economic Education, lays out the different skills, materials and jobs utilised in the production of a pencil. An inexhaustive list includes cedarwood from Oregon, logs from California, graphite from Ceylon and clay from Mississippi. The list was so comprehensive that Read even named the lighthouse keeper signalling the ship in and the factory worker sweeping the floor as part of the employment dependant on the pencil.
B2C might dominate brand awareness for obvious reasons, but what is less obvious is it’s inescapable foundations in B2B. These companies play a vital role in our ongoing economic recovery and – drawing on lessons learned during previous economic challenges – here are some of the trends that we expect to play out over the coming months and into 2021.
Below the Line to Above the Line
Even in normal times, businesses tend to place a skewed emphasis on lead generation and brand conversion when they should be focusing on the top of the funnel. Typically, 90% of marketing spend is allocated to short-term lead generation, which translates as telemarketing and mailshots. This balance should be much closer to 50%, with the remaining 50% spent on building brand equity. A shift from Below the Line to Above the Line is essential if brands want to recover well.
Lead-generation tactics do have a role to play. Still, the B2B industry can be guilty of neglecting emotional marketing in favour of rational campaigns, and here they lose their power to attract new interest. The B2B Brand Index Study – the most extensive global study of its kind – established that creative campaigns are 12 times more efficient at delivering business success.
While there are clear differences, B2B and B2C also share certain similarities. For instance, brand awareness among a target audience will always be a fundamental part of securing revenue. A B2B decision-maker will not be as impulsive as a consumer, for example, choosing Coke or Pepsi, but it is still vital that your brand is well known.
This brings us to the Rule of Three – a well-documented concept of brand market share and consumer decision making in a developed market. When looking for the answer to a problem, a prospective customer will have around three known brands that could solve the issue immediately spring to mind as a result of exposure to memorable campaigns and sustained awareness building. Further research will often expand this pool of options to around ten brands, but when it comes to the crunch, one of the original three will win the purchase between 70-90% of the time.
Value for Money
Marketing budgets have been understandably pared back this year. In an April 2020 survey, 90% of respondents said their budgets were delayed or under review. The full economic impact of the COVID-19 is not yet clear, but we are a long way from normal market confidence, and many businesses are increasingly cautious when it comes to allocating marketing spend.
We know that this approach is wrong. According to System1, advertising ability to connect with people remains as strong as before, and media consumption has risen during lockdown. The CPM of Facebook advertising has gone from $1.88 in November 2019 to $0.81 in March 2020. In short, the ROI for marketing spend is better now than before and so those who can spend, should.
The events industry has clearly been badly hit, with months of planning, investment and time redundant. But seminars can become webinars and conferences can become virtual, and while this is small consolation for a devasted industry, virtual versions are generally cheaper than in-person events. This will leave a surplus of budget previously earmarked for events which means a reallocation of money to other facets of marketing to stimulate new revenues and a better recovery.
Think Long Term. Hold Your Nerve.
Institute of Practitioners in Advertising case studies show that brands that maintain marketing investment in recessions grow 4.5 times faster than brands that cut spend. Those that cut spend also struggle for longer and take five years to recover revenue. A marketing black-out might alleviate damage to bottom lines in the short term, but it will breed serious problems and long-term profit loss.
Of course, many brands will pursue the short-term fix and cut marketing costs, and this presents an opportunity for those willing to be bold. It might not feel like a wise investment as profits tumble alongside the rest of the sector but maintaining or increasing spend will allow brands to outflank competitors and for smaller brands to increase their share of voice and gain ground on more cautious industry leaders.
It remains to be seen how short-term marketing cuts will pan out in the mid to long term, but changes are indeed afoot. Crises are catalysts for change and, like any crisis, the current one will have winners and losers. Brands that hold their nerve, innovate and invest in their recovery are likely to see the benefit in the long term. The current economic uncertainty is accompanied by changes in other aspects of the way we live, work and travel. Rather than a threat, it presents an opportunity.
5 ways to keep your team connected with split working
By Sam Hill, Head of People and Culture at BizSpace
As the government switches its message back to “work from home” where possible, businesses face a challenge as their employees are split between locations, with bubbles in one place and individuals elsewhere.
Although technology has permitted teams to stay connected over the past few months, the return of some employees to the office presents a new challenge to leadership as they must ensure those who remain working from home are not left behind. As teams typically speak less frequently when working remotely, employers must ensure that their employees who are not yet in the office do not feel isolated and that the culture remains unchanged.
Employees have a need to feel valued and connected to other members of the firm, even when working remotely. To aid business leaders in ensuring they avoid ostracising colleagues at home, this article provides practical tips for employers on achieving an inclusive workplace while their employees engage in split working.
Maximise the use of technology
When part of the team has returned to the office, it can be easy to forget to include remote working employees in particular conversations which may happen in passing or casually during the day. For remote working employees, this can be a significant contributor to them feeling isolated or that they are unable to sufficiently complete their job at home.
To combat this, business leaders should ensure their teams continue to use technology to their advantage. To maintain the communication which can be lost with remote working, management should continue to host daily or weekly team meetings via video conferencing, where employees can catch up and share what they are working on. This will ensure all employees continue to build connections and celebrate their achievements.
Encourage team work wherever possible
When employees work separately in different locations, it can be easy for those away from the office to feel isolated and detached from their direct team. Despite this, business owners should encourage teamwork wherever possible to allow the group to solve issues together and meet targets in a more efficient and effective manner.
Employees working remotely can struggle to speak up when they are facing challenges since they cannot turn to a colleague as quickly to ask for advice. By encouraging team members to work together, this issue can be combated as employees build a natural relationship over time where they feel more comfortable reaching out to their peers, while the added benefit of being virtual ‘opens the door’ to new lines of communication between colleagues which may not have communicated face-to-face.
Reinforce the company culture
While employees are split between home and office work, it can be easy for the culture of the company to begin to slip. It is important for leaders to ensure they are proactive in nurturing and reinforcing the company culture, since healthy company cultures have a direct impact on the performance of teams.
Taking the time to reinforce the vision and values of the firm to employees will help to ensure the team is in touch with the wider goals of the organisation. Coupling this with the open communication of any news or updates relating to the company will allow for transparency, an important trait which ensures employees remain loyal to the company. Uncertainty is detrimental to the morale of a team, so any communication should be as clear and certain as possible.
Introduce lunch and learn talks
Lunch and learn sessions are a great way to ensure businesses are stimulating employee engagement and generating a positive team activity. They are typically less formal and can offer employees opportunities to deliver talks on a variety of topics which are directly or indirectly related to the business.
For employees working remotely, this is a perfect way to ensure they are still able to engage in training, with video and audio conferencing opening up the ability for remote workers to tune in wherever they are.
Don’t dismiss virtual social events
Although the use of zoom quizzes and calls quickly became tiresome for many employees during the national lockdown, the use of virtual social events should not be dismissed by businesses. For employees still working remotely, these social events are a direct replacement for the usual social events and informal drinks after work which they would have otherwise attended. Since employees who have returned to the office may be engaging in more social events in person, it is imperative for businesses to facilitate a space for remote working employees to socialise.
Social events are an easy way to create natural conversation opportunities and bring employees together on a far more personal level. They also contribute to the success of the firm by boosting the morale of employees, leading to higher productivity and satisfaction in teams. This, in turn, can boost the company culture as employees feel a higher sense of loyalty to the organisation, even from their remote locations.
The new virtual leaders – adapting your leadership style for a changed workforce
By Debbie Clifford, Head of People and Talent at Olive
During this pandemic, organisations across all sectors have witnessed a dramatic change in workplace structure, and as such have had to undergo huge changes themselves to adapt and pivot to the needs of their organisations and new, remote workforces.
With many finance organisations continuing in the main to operate remotely or operating a hybrid office model, senior leaders in finance have been required to adapt their leadership approach, shifting from the traditional ‘boardroom culture’ to a more approachable and inclusive management style.
The key characteristics of the new virtual leader
Prior to the pandemic, leadership, in general, was starting to move towards a more open and trusting relationship between leaders and teams. Yet there hadn’t quite been the evolution towards a more emotionally intelligent and involved leader.
While challenges or issues relating to staff were easier to pick up on in the office; previously, managers could take cues from certain behaviours and attitudes witnessed during the working day. Now, that’s almost impossible, and leaders are having to invest more of their time in people management, which presents both a challenge and an opportunity.
The shift in emphasis on the management of people will continue to grow in the remote workplace. Yet leaders have to accommodate this while still having to meet their own ongoing commercial and operational targets. It’s tough, but ultimately the more you invest your time in your people the more likely you and your team will succeed. Managing true performance, giving feedback regularly, interacting, and ensuring regular check-ins will stand you in good stead to achieve your goals with the support of an engaged team.
Build Trust. Communicate.
With everyone working from different locations, it’s hugely important to instil trust in your people and become more output focused. There are various performance tools that can help you to achieve that, such as goal setting (using your HR system or Performance platform), ticketing systems such as JIRA or CSAT data that comes back from Voice of Customer surveys, as examples. It’s also equally important to have open and honest conversations with your people about how the world of work has changed. The changing nature of our day to day work may mean that your team may feel that they are being questioned more, possibly even micromanaged – due to the increase in internal meetings and catch up’s. It’s really important to communicate the reason for this, due to less ‘in person’ interaction.
Employees not used to home working have found themselves without the face to face guidance they are used to, thus the reciprocal trust between team member and manager becomes even more important to hone, alongside measuring productivity and output of work. Also remember that everyone will be struggling at times and many are suffering from the shift to permanent home working. Microsoft reported how the move to homeworking has impacted the global workforce. People are working longer hours, starting and finishing later, are overworked and stressed.
As a leader, and an emotionally intelligent one, it’s important to be mindful of the effect of home working and that there’s no separation between work and home anymore.
Trust is one of the most important traits you want to cultivate and build in your team, being authentic, open and honest will take you to performance you never thought you could achieve. Your behaviour as a trusting leader will enable you to drive performance and loyalty from your team that will exceed all expectations. It is key to driving empowerment, accountability and ultimately, productivity.
The importance of HR
Look to your HR team for more guidance, as the disciplines of HR have and will continue to change during this time. Previously, HR in the main was the recruitment arm for the business or for discipline or exit purposes. Now HR is central to driving team engagement and development.
This period, viewed positively, should allow for your employees to have more capacity to bring on their personal development (no long commute for example) and many will be actively seeking this. See it as an opportunity, as in turn it will be valuable to your organisation. HR is key to fostering team environment and collaboration; Encourage your HR team to drive an engaging personal development programme for your employees to make them feel valued and valuable.
Appraisals will also need to change and be more agile. What you set today as a performance goal could easily change tomorrow due to the current market dynamics. By focusing on people, the more time efficient you become, and the more interactions you have, the more you get buy in. Your team will understand more about your objectives and intent and feel more bought into the overall vision and goal.
Get involved and show recognition
Be visible on the team internal and external socials. Break the barrier. Work has changed so much that we’ve all had to change. Prior to Covid some leaders and senior management may have felt that being visible on the company social channels may not have been appropriate. This is not the case now. And it doesn’t have to be all about company business. Make it personal and be human.
Thank and show your team that you have noticed them. Find somewhere where you can share recognition, such as the company Teams channels or intranet which are great for peer to peer feedback and help keep people engaged in the company activity. Reward good effort with the offer of a few hours off or send some flowers. It will make your employees day and show them they are valued. Small gestures of kindness go a long way in this virtual working world.
Create a management and development pathway
Shared learning is a great way to engage the senior team members as part of a learning and development pathway that cascades through the business. Examples of this include small bitesize pieces of learning, such as packaged business leadership content, a TED talk, white paper or video that senior leaders can absorb, and coach to their managers, which in turn then cascades through to employees.
Done on a regular basis, this practice helps your finance firm move your management teams forward. It’s a structured way of learning and sharing with a consistency of language and approach – with everyone seeing and learning the same things.
The importance of self-discipline
It’s never been more important for leader’s to not burnout and be a positive role model to the organisation.
Be disciplined – don’t be ‘always on’ and responsive all the time. Be aware that leading by example will have a positive impact on your organisation. Think about what works best for you as a leader and make time to move away and have some space – your team will respect this and follow your lead.
It’s important to remember and acknowledge that we are all learning all of the time – and that often we don’t have all the answers. Showing a level of vulnerability, humility and honesty to your team will go a long way towards connecting with them in a deeper and meaningful way, and more than ‘being the boss’ and getting tasks done. High performance is gained because of the way you trust and believe in people, not because of your status in the hierarchy.
Ultimately, successful leaders are ones who create their culture, who are liked and respected by employees. Post pandemic the new workplace could and should be a much better place, with much better leadership. If we don’t use this time as a catalyst for change, we’ve potentially missed an opportunity to make something bad something much, much better.
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