I bet you’re breathing a huge sigh of relief about now. 2013 is a closed chapter and a fresh, new 2014 calendar awaits your business strategy. If you haven’t already reviewed 2013, now is the time to do it. What worked for you last year and what didn’t? Where were you most profitable? Being more selective with opportunities presented to you in 2014 will positively affect your bottom line.
I’ve already
let several projects from 2013 fall to the wayside in 2014. They made sense
last year, but as I continually raise my business standards and become more
selective in where I put my energy there were several things that I’ve let go.
In addition
to reviewing 2013, another project on the top of your list should be your
annual growth strategy. I don’t know anyone who doesn’t want to grow their
business. But let’s get specific. Do you want to grow your business 5%, 10% or
more this year?
There are
several ways to grow your business. One way is to reduce your bottom line. The
other is to increase your sales. Let’s take a look at reducing your bottom line
first. A little planning and strategizing could save you a total of 5-30% in
this area. Here are some simple suggestions to save money, which in turn will
put more back into your bank account:
·
Negotiate
lower merchant account credit card processing rates. Did your credit card sales
increase this year? Do you expect more sales this year? Call the merchant
processing company and tell them you are looking for lower rates. If you reduce
your rate by 0.5-1% you’re doing well.
·
Review
your annual cost of goods spending and shop around for the best prices on
ingredients. This year work on buying in bulk to lower your costs. Instead of
purchasing in small quantities frequently, determine price breaks and order
quarterly or twice a year instead. This can save you anywhere from 3-5% or more
on your cost of goods spending.
·
Re-evaluate
contracts, service subscriptions (webhosting, etc.) and memberships. Which of
these are worth keeping and which have little to no return on investment? Estimated
potential savings here is 1-3%.
·
Review
shipping costs from suppliers. Would you save money buying in bulk and shipping
your orders via freight versus UPS? You could save up to 10% on current
shipping costs depending on your buying habits.
·
Re-evaluate
your marketing budget. What did you pay for marketing in 2013? Which of
your marketing initiatives resulted in a high return on investment? Which did
not?
Let’s look at increasing sales
Have a specific goal in increasing sales (i.e., this year we will increase sales by 20%). Here are some suggestions on how to increase sales:
Have a specific goal in increasing sales (i.e., this year we will increase sales by 20%). Here are some suggestions on how to increase sales:
·
Nuture
relationships with current customers. Your best customers know your brand and
will have good suggestions on what products to add, how to improve customer
service, new services and more. Tap into their resources and remember to reward
them with discounts and paybacks.
·
Upsell
to customers. Did you know that more than 80 percent of sales are impulse
purchases? This is a relatively easy way to increase sales by 5-10 percent
annually. Ask for the sale at checkout (i.e., “Would you like to take advantage
of our lip balm special?”)
·
Add
new products or services. Be specific. For example, how many new products will
you introduce by May? How many by September?
·
Increase
your wholesale and private label accounts. How many annually? How many new
accounts does that mean per month? Per week?
·
Re-evaluate
your retail sales. Which trade shows and retail shows were worth your time last
year? Are there new shows you want to try this year?
·
Update
your website. There’s always something to improve, from product photography to
product descriptions. Add quality search engine optimization and increase your social
media interactions.
·
How
can you work more efficiently? Distractions lead to wasted time which cut into
your bottom line. Schedule your time, limit access to time-wasting websites
(use apps such as RescueTime to see how much time you’re spending on Facebook
and other sites). If you spend less time on Facebook weekly (five to seven
hours per week), what could you accomplish in that timeframe for your business?
·
Disorganization
is another efficiency killer. How much time do you waste looking for
ingredients or packaging that you were sure was “just right there” but now you
have to place a rush order to fill an order? It’s frustrating – I’ve been
there! Invest in inventory software. Get your business organized into a mean,
lean operating machine.
These are
just a few suggestions to get your business ready for a fabulous 2014.
Prioritize what makes the most sense for your business. Then begin implementing
them as soon as possible. Keep good records so you can track your results. Once
2015 rolls around you’ll be ahead of the game. Happy sales (and savings).
I'd love to hear your tips on increasing profitability.
I'd love to hear your tips on increasing profitability.
Reprinted with permission from the January 2014 Saponifier Magazine, written by Marla Bosworth
