4 Ways For Small Businesses To Protect Their Profit Margins
***Contributed Post
It’s a truly wonderful thing to be able to go into business for yourself. To see an idea that began life as a sketch in your notebook slowly blossom into a living, breathing and fully functioning enterprise. To develop a product that could change the world or at least shake up your chosen industry. To give up the rat race and carve out a niche for yourself in your chosen market, making a living on your own terms and taking your career into your own hands. But while this can be extremely liberating, it’s not without its risks. Benefits and paid vacations become a thing of the past and your personal fortunes are tied inextricably to those of your business. In order to make your enterprise viable in the long term you need to be able to invest sufficiently for stability and growth while still ensuring that your profit margins are healthy enough to facilitate easy cash flow.
And that’s much easier said than done. Here are some ways in which new startups can protect their profits and reduce the risk of cash flow problems that could see them sink in a quagmire of debt…
Outsource your IT support
IT provision is likely an essential facet of your business, no matter what industry or field you choose to apply your skills to. But investing heavily in IT infrastructure not only represents a significant overhead, it can become a black hole as you constantly upgrade and renovate your systems. Using Outsourced IT Support is often far more cost effective. You will be afforded proactive monitoring to stop any issues in their tracks, expert advice on how best to tailor your tech to your business’ needs and regular auditing to ensure that you’re getting your money’s worth.
Encourage customer retention
While a business with growth on its mind will always be on the lookout for ways to attract new customers it’s worth remembering that it costs up to 6 or 7 times more to attract new customers than it does to retain those who’ve already used your business. While a potent marketing strategy is a no-brainer, this shouldn’t come at the expense of implementing customer retention strategies. Here are a few you may wish to consider;
- Rewards schemes.
- Introduction incentives (giving the customer a little something every time they introduce someone to your business).
- Customer satisfaction surveys.
- Follow up or ‘thank you’ messages.
- Email shoots.
Use CRM to check your progress
Whatever the nature of your business, you need to ensure that your customer relationships are manages successfully. A Customer Relationship Management software solution like Salesforce is a great way to track which customers are engaging with you regularly and which are not. This will enable you to double down on retention techniques that encourage repeat custom while enabling you to come up with new strategies to bring lapsed customers back into the fold.
Always question your processes
Finally, it’s important for any small business finding its feet to keep an eye on its processes and ensure that they are as efficient and productive as possible. Keep in constant contact with your employees on the ground and encourage them to share their insights. If they can identify ways to make your processes more efficient they could help your profits to skyrocket.
It’s a truly wonderful thing to be able to go into business for yourself. To see an idea that began life as a sketch in your notebook slowly blossom into a living, breathing and fully functioning enterprise. To develop a product that could change the world or at least shake up your chosen industry. To give up the rat race and carve out a niche for yourself in your chosen market, making a living on your own terms and taking your career into your own hands. But while this can be extremely liberating, it’s not without its risks. Benefits and paid vacations become a thing of the past and your personal fortunes are tied inextricably to those of your business. In order to make your enterprise viable in the long term you need to be able to invest sufficiently for stability and growth while still ensuring that your profit margins are healthy enough to facilitate easy cash flow.