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3 operational changes that improve your profit without spending money

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Access any social media platform today and you’ll have an array of advertisers showcasing the next sensational program to improve your clients’ sales flow. Almost all of the options require a large investment that promises increased profits and doesn’t necessarily address some of the reasons businesses aren’t as profitable. Often, small businesses ask if they should invest more and more in marketing so they can produce even more sales conversions. Before recommending that they turn the wheel to invest more in marketing, think about why potential customers are turning down your offer.

Making a profit in business is intentional, strategic and calculated. Although we’ve all heard of the viral video reaching millions of followers, it’s not a strategy I would follow to build a sustainable business model. Lasting results that lead to strong profits are achieved through continuous testing and measurement that can provide the insights and data needed for continuous profit improvement.

Before investing more money in your marketing budget, you should first assess your business to understand its strengths and opportunities for improvement. To increase your small business revenue, here are three operational changes you can make to double your return on investment (ROI) and secure your small business’ future without spending a ton of money.

Related: Start 2022 with a SWOT analysis

1. Emphasize zero-based budgeting (ZBB)

Get into the habit of evaluating expenses on your income statement and its justification every quarter. It’s alarming that so many small businesses don’t actively analyze every expense category periodically. In a small business audit, a company with ten employees spent $3,000 per month on business meals. When I interviewed the owner, I learned that a few staff members had taken one too many lunches with the company credit card. At an average of $15.00 per meal, over 200 meals were spent in 30 days among ten employees. Our team introduced a change in meal expenses that limited meals to $100 per staff member per month or the ability to receive a $100.00 bonus on their salary. This has allowed the company to save more than 60% per month on meals without reducing employee morale.

2. Improve your average close-sales ratio

This is one of the easiest ways to solve a profit problem. The first area to consider when evaluating a small business is its final conversion. In other words, how many customers had the opportunity to be exposed to their product and service and decided to buy from them. Simply put, the close rate depends on how effective your sales team or sales funnel is at converting new leads into new customers. Every industry has benchmarks for determining the ideal closing rate. Therefore, if we could analyze why potential customers declined the offer, we could improve the close rate.

Recently, I was coaching a company in the home services industry that had a close rate of 29% when the average close benchmark was closer to 50%. Instead of investing more in marketing, we developed a simple tracking system on Google Sheets to understand why someone rejected the offer every time. In doing so, we were able to observe patterns among considered promotional offers, discrepancies in ticket prices, and even differences in specific postcodes. Once we fully understood why customers were rejecting offers, the company set out to implement a robust internal training program to address all the reasons why a prospect might not register with the company and offer better responses and more personalized incentives. Within six weeks of introducing the process, the company saw a 9% increase in its overall close rate.

Related: How your marketing team can help reps close more deals

3. Invest in the well-being of your employees

It’s one of the easiest ways to improve your bottom line. According to The most recent statistics from the Department of Labor, more than 11 million jobs are open in the United States and the workforce is desperate for more employees to hire. Yet many companies don’t put enough effort into the personal well-being of their employees and ask them what they need to feel happy, secure and more invested in their role. One of the most affordable ways to reduce company turnover is to invest time and energy in your staff. Although staffing is often the most costly aspect of a business, reducing the cost of employee turnover is just as essential. Viewing your employees as your most valuable customers can be the first step in changing your company’s culture. The best marketing tool a company can have is a satisfied employee because they are on the front line every day with your prospects and external customers. Here are simple and affordable ways to invest in your people and support your bottom line:

  • You can ask each staff member to complete a personality assessment to get to know them better, including their interests, motivation, communication style, and things that would reduce stress.
  • Create a safe open door policy for employees to share their thoughts without repercussions.
  • Openly discuss a company’s ongoing support to improve their mental health.
  • Encourage them to take short health breaks throughout the day so they can be more productive.
  • Surprise your team with small thank you cards or small gifts of appreciation.

Related: Is your company embracing these employee wellness trends?

With social media, there are many ways to divert our efforts and look for a magic pill to improve our bottom line. Yet more often than not, the answer is inside and we need to turn our attention to the company’s internal executives. attention to the company’s internal executives.