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How To Maximize Profit As A Small Business Owner

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Business owners are mostly concerned about cost reduction and profit maximization.  In order to increase profits, one must be diligent enough in cutting excess costs.

The author of “Six steps to creating profits” stated that nearly two-third of small businesses don’t make profit or they fail to increase their profits from the year before. Therefore in this article, we will be exploring various strategies that could be used in cutting costs, increasing profits and improving your bottom lines;

1. Analyze And Adjust Operating Procedures

Looking at documents like balance sheet, one might find it difficult to understand some terms. However, understanding these terms is important. It would help you a lot in understanding your financial statements to be able to improve your business’ fiscal health

Operating costs (OC) is one of those terms and it is incredibly relevant to business owners. Also known as operational expenses, it is the costs attributed to producing goods and services. Therefore, the first step to reduce cost is to analyze where and how funds are been disbursed. This way, you would be able to track your efficiency and also determine whether to trim or completely stop any operating cost.

The biggest category of OC for almost all business owners is overhead. To reduce this and generate more income one should try to; embrace technology by automating and streamlining business functions, outsource certain business practices to a third party, look around for better rate, telecommute instead of spending too much on an office space.

2. Increase Staff Productivity 

Like Shackleton said, “The personnel of an expedition…is a factor on which success depends to a very large extent”. Employees are everything to your business. When your employees are happy, they accomplish more quality work in a short period of time. They also go out of their way to ensure that the business is sustainable. Therefore, to maximize profits and reduce costs, consider using simple motivation techniques.

For example, reward the employee that increases his/her output or meets a target. Introduce fun activities like picnics, games. Send personal notes of congratulations or thank yous to employees at their homes. Training and skill advancement seminars are also good techniques that can be used in motivating your employees. Investing in that will not only make them happier, they would be inspired to work efficiently and remain loyal to your company.

3. Understand Your Customer’s Needs And Adjust Your Business Plan Accordingly

Understanding your customers –  their needs, why they should come to you or why they are coming to you-  is important in maximizing profits in your business. Also look into how best you can ease their problems compared to your competitors. Adjusting your business plan with this will make you better positioned for increased profits.

There are couple of ways to gain insights into what your customers might need from you; conducting focus groups, listening to your customers on social media or doing keyword search.

4. Raise Prices To Increase Profits

Evaluating the cost of your products/services by reviewing your cost structure is an important aspect of maximizing profits. When the cost of raw materials and other related costs increase, the additional costs should be included in the selling price. However, do this without driving away customers by adding to the perceived value. This way, customers will be willing to pay for your product or services regardless of the price.

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Business

Networking Is Dead

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“Networking as we know it, is dead,” says Scott Gerber, the CEO of The Community Company and author of “Super Connector: Stop Networking and Start Building Business Relationships That Matter.” I quite agree with him, or should I say maybe we are not doing it the right way.

People have over 500 connections on LinkedIn, and most do not even know a single one of them, well maybe one or two family members and a few friends. For example, I have 224 connections, excluding my family and friends on LinkedIn, and I am yet to speak with any them. These days we dwell so much on the number of connections we have, the number of business cards we were able to collect and give out, and the small talks we might have had in the process, that we abandon the sole purpose of connecting with people.

“Rather than growing a huge network focused on sheer numbers, building a strong network is about establishing a relatively small number of deep, high-quality, business relationships based on common values. The ‘why’ of connecting is focused on people first, opportunities second. Allow yourself to help others. Don’t feel like you are too generous or giving away too much with nothing in exchange. Keeping score won’t do you any good.” – an excerpt from the book ‘Networking is dead – making connections that matter’ by Larry Mohl.

To create strong relationships that can boost your personal and professional goals, you would need to focus on relationship building instead of being a networker. Networkers are short-term thinkers, very transactional oriented. These days, people use relationships for their personal gains and strategies. Meanwhile, a relationship builder realizes beforehand that social capital is the most important currency she will ever have. She is empathetic, emotionally connected, intelligent, curious, and a people lover. Unlike the networkers, she thinks more long-term in terms of value creation and naturally generous towards others. Building deep relationships can take a while; however, you will reap the benefits from them later on.

To be a relationship builder instead of a networker, you should think like one, according to Gerber, there are three kinds;

The Thinkers; They are curious and have lots of ideas running through their heads. However, they are not always good at executing them. If you are one, you should make an effort to share those ideas with people. Look for people who can help or inspire you to put those ideas into action.

The Enablers; They assemble people and share their ideas with them. An enabler is that friend that would always email you to introduce you to someone she thinks might be able to help you out

The Executors; These are the accomplishers; they make people’s ideas happen. If you are one, find ways to expose yourself to as many new ideas as possible. Maybe, you can start reading new publications or following new hashtags related to your industry.

Before we conclude, here are some tips for you to enjoy the benefits of relationship-building; 

  • Change your approach,
  • Develop your expertise,
  • Build your relationships around a shared interest,
  • Share what you know with people,
  • Focus on a higher goal,
  • Make sure you follow-up on all your contacts.

Like people say, “you don’t have to reinvent the wheel or be the boss of a company to be a successful person.” To get great things done, open yourself up to new ideas and people; build strong relationships.

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Marketing Communications

What A Marketing Communications Strategy Is And How To Do It Right

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What is marketing communications strategy?

Marketing communications strategy is the strategy used by a company or individual to reach their target market through various types of communication. It includes your message (what is to be said), the medium (where it is to be said), and the target (to whom your message is reaching).

You might be wondering: what’s a marketing communications strategy that always works, even without a budget?

Easy: build relationships with journalists to get press coverage, guest posts, and backlinks.

Marketing communications or Public Relations is the ‘Promotion’ bit of the “4P’s of marketing” you might have learned during your university days (product, place, price, promotion).

Since “marketing communications strategy” is a mouthful, most people just shorten it to “Public Relations” which essentially uses online channels and software to identify relevant journalists, pitch them suitable stories and earn free media coverage.

Usually, PR strategy means building top of mind awareness amongst your ideal customers about the product or offer.

How you go about this will depend a lot on your experience, industry, and budget. If your marketing plan has a budget of a million dollars to spare, you can reach out to your target market with a promotional mix that includes TV or Facebook ads.

However, if you’re like most entrepreneurs, you want to promote your business without breaking the bank.
And there is no better way to do that than by managing your own PR campaign internally without retaining the services of a media relations company or a full-service marketing company.

Wait, do you mean “free as in ‘free lunch”?

Exactly! If you apply the methods in this post to your own marketing communications strategy, you’ll learn how to build lasting relationships with journalists and influencers, get free press, and acquire more customers through a sustainable organic approach.

Anyone from your team can easily play the role of a marketing communications manager. You don’t even need to hire a dedicated marketing communications specialist!

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