Dear M & M:
I’d like to start the New Year out right. What can I do to try to increase profitability in my business in the upcoming year?
Every business needs to take a look at both sides of the income statement. How can I increase sales? How can I decrease expenses? Everyone always has a tendency to look at cutting expenses first. Take a good look at each line item on your income statement. Do I need to lease that warehouse for storage? Make some phone calls to compare insurance rates. A complete competitive analysis needs to be done on all expenses. Are there other suppliers or service providers that can give me the same service or goods at lower prices? Take a good look at your marketing activities. When was the last time or have you ever done a complete marketing plan? Have you measured the effectiveness of your advertising that was done in 2013? Do you even know what you intended to do (increase foot traffic, increased brand awareness, increase sales, increase inquiries, gather email addresses). After you have examined each line item on your income statement that was an expense it is time to take a look at the income side of things. Do not assume if I lower my prices I will sell more stuff and this will fix everything. Take a look at what can I do to generate more sales without lowering prices. Easiest answer is to sell more complimentary products or services. Every company has to take a good look at their industry and see what fits. If I am a web designer maybe I can branch off and show people how to do YouTube videos, email marketing campaigns, schedule tweets, reputation management or show them how to do a blog to attract more people to the web site. If I am a pet groomer maybe I can offer to people that see me to groom their pet a pet sitting service when they are out of town? Take a good look at the space you are occupying are you getting the proper revenue from the products you are selling? Is your inventory turning according to industry standards? Do you even know how many times businesses like yours turn their inventory? Maybe I can discontinue that product line that isn’t selling and try something new. Is there a product or service you can offer competitively that people want to buy that isn’t currently being sold in your market? That is the question you should be asking yourself every day. Consider partnering and leveraging resources where they make sense.
To ask your questions: Call the Small Business Development Center(SBDC) at Cochise College (520)-515-5478 or email firstname.lastname@example.org or contact the Sierra Vista Economic Development Foundation (EDF) at 520-458-6948 or email email@example.com .