Boost Your Small Business's Bottom Line Through Easy Changes

Social Media, CRM and a Fresh Look at Marketing Lead the Way

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Small-business owners need to change their practices to focus more on profit, according to Patricia Sigmon, founder and president of David Advisory Group a firm that specializes in helping CEOs and small and midsized businesses reengineer their business practices. Sigmon, author of Six Steps to Creating Profit (Wiley), notes that nearly two-thirds of small businesses either didn't make a profit last year or failed to increase their profit.

She suggests several steps businesses can take to improve their bottom lines.

Change operating procedures.

You need to generate more sales while reducing expenses. To increase sales, try cross-selling -- offering new services or goods that complement your current offerings (such as a chiropractor selling vitamins). Switch to a relationship-based sales model that gets customers coming back to you -- offering monthly or yearly service plans, or a bundle of visits at a discounted price (like a series of 10 gym visits). Or lure new customers to try your product with specials or giveaways. To trim expenses, audit your administrative functions. Are there routine tasks you could outsource to save money? Would it be more cost-effective to hire part-timers to do these tasks?

Stay visible and connected.
Accreditations, licenses, and certifications -- for your business or for individual employees -- can set you apart from your competition.

Take your reputation online, using social media, your website, and a blog to connect with clients and make strategic alliances. Use ad sharing with complementary businesses, and take advantage of affiliated marketing online tools to drive new customers to your site. Eliminate stale, ineffective alliances that may be dragging you down.

Maximize your cash flow. 

One of the best ways to achieve a stable cash flow is to offer prepaid retainers or ongoing payment plans. For example, instead of a one-shot eight-hour job at $125 per hour, offer a discounted 10-hour retainer plan at $100 per hour. At first, this may not seem as lucrative, but it establishes a relationship and keeps the door open for additional work. Maintenance contracts for service-based businesses are another way to create a new revenue stream.

Streamline management costs. 

How efficient are your employees? How many customer leads do you get? How much are you owed in accounts receivable? Questions like these need to be answered immediately, and to do so, you need to automate your business. Create a system for employees to access and add data, keep all information updated and synchronized, and be sure to build in back-office administrative time (to manage your accounts and your business) into your project fees, hourly rates, or ongoing charges. Automation will allow your business to run smoothly, and will help a scaled-down workforce accomplish more back-office work.

Raise the marketing bar.

Networking used to mean cocktails and handshakes. Now, marketing is all about immediacy.

Give your business an instant presence through online networks including Facebook, Twitter, YouTube, and LinkedIn. Set up group meetings, sales presentations, and special promotions using webinars. Offer tutorials, demos, or new certification sessions as webcasts or podcasts for immediate download. Measure all of your marketing efforts to see which ones are cost-effective. You can do this with a Customer Relationship Management (CRM) software solution linked to your accounts receivable system.

Make everyone a salesperson.

From telephone to email to face-to-face meetings, every employee has the opportunity to spread your company's message and engage in potential sales-generating behavior. Everyone needs to pitch in to help: cutting costs, selling, networking on the web, marketing, and more. Get them motivated to sell your message by encouraging self-development, or through roundtables, conferences, lunch meetings, and webinars.

Reward employees who seek continuing education, or who make an extra effort to represent the company inside and outside of work.