Finding Hidden Profits in Your Business

Taking a systematic approach, every business owner can find ways to make more money from their business right now. Doing so takes time, commitment and dedication, but the rewards will benefit your life, your family and your future. Some items mentioned may be obvious and already part of your weekly or monthly actions. If you’re doing all 12, I’ll buy you lunch!

1. Are you getting more customers? Okay, so this is obvious and every business owner spends hours prospecting, marketing and proposing every week finding new customers. Enough said; just don’t stop there.

2. Would your customers buy more if offered? Offer up-sell items. Think about what they might want next. Offer to call back on the next item, next month, next quarter, next year.  Make sure you have a process for reminding yourself and really do follow up.

3. When can you raise your prices? Not an easy task, admittedly.  Knowing when to start raising them, how much, and how to handle your existing customers smoothly is a customer satisfaction skill every successful business person must master. Start by finding ways to determine what your competition is charging.  If you’re too low, now might be time to start reviewing and tweaking your prices.

Ask yourself:

Am I capturing all the profits my business can produce?

What can I do today to make my business more profitable right now?

It is no profit to have learned well, if you neglect to do well.
Piblilius Syrus (~100 BC)

4. Are you charging for everything you’re delivering? Although many service workers charge by the hour, you may be consistently missing some of the time you are entitled to charge if your tracking process is inadequate. Are you tracking work you do at odd hours, odd locations, or short activities?  Are you writing it down at the end of every day? Are you accounting for all the hours in your working day?

5. Are you estimating your costs correctly? If your project is quoted and must be delivered at a fixed price, how is your estimating accuracy? Do you have a process for tracking it? Are you checking your job estimates against actual costs?

6. Do you handle customer change requests professionally? Having an accurate and detailed description of the job/project/quantity allows you to point out changes requested by the customer. Often you can expect customers to pay for mid-project requested changes. Many you can expect them to pay.  Do you have an adequate change order process?

7. Are you getting paid fast enough & often enough? If you wait till Friday to invoice, you may have caused a week’s delay in getting your money.  Cash flow is the life blood of your business. If you have long projects, are there sufficient progress points being invoiced?

8. Where can you cut your expenses? Everyone can cut something somewhere.  Shop your basic expenses. Periodically get new insurance quotes. Occasionally look over your expense transactions with a fine tooth comb. Are there items you don’t get sufficient value from to keep paying for?

9. Are you keeping your business in the minds of your customers? Thank you notes. Call them to check in. Are they still happy with the work you did a few months ago? Sometimes just checking in creates a new sale. Do they know of any one else who would appreciate your good work?

10. Do you regularly conduct job debriefing audits? At least once a year pull out 3 of your most profitable jobs/projects/products and 3 of your least profitable. Step through them in detail. Notice trends. What went right that you could do more of? What went wrong that needs changing?

11. Could you keep up on tax deductions? Probably not. Unless you love tax intricacies, get help. Read the book “422 Tax Deductions for Businesses and Self Employed Individuals” How many apply to you? Don’t wait for tax season, either or you’ll have lost out on the items you should have been tracking all year.

12. Is your money working as hard as you are? Not all your emergency funds should stay in your checking account, or even a money market account. By taking a tiered approach, you may be able to get better rates of return and still retain access to your money.  Look at your retirement investments at least once a year too! Good choices a year ago may not be so good now. Can you afford to lose $4,662? (This is an actual difference of two historically great funds compared over 5 years on a $10,000 investment).

Picking even one of these profit producers to work on will improve your business.  Do all twelve and I’ll be buying lunch! Send me your story; tell me what you’ve been doing in each category and I’ll buy lunch.

As a former SCORE Counselor, small business profitability consultant, Certified Financial Planner, and active member of the Reading Berks chamber’s small business programs, Merra Lee Moffitt keeps her eye on the pulse of Eastern PA Business.  Having created and built her own 30-person company, she KNOWS how to solve small business problems.  A recognized expert on service business issues, Merra Lee can be reached at 888-920-2030 or MerraLee@CaptureProfits.com.  © Copyright 2004 Merra Lee Moffitt.