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Four easy ways to make your business more profitable

All business owners are primarily in it for the profit. Naturally, they want to make money, and secure as high a return on investment as possible.

However, despite this fact, many Chester business owners are missing easy ways to make higher profits. It really does not matter what type of business you run, the tips below will help you to make 2017 an even better year than the one that has just ended.

1. Eliminate poor working practices

One of the biggest mistakes company’s make is to neglect their processes. They tend to let the way they work evolve, rather than introduce steps in a planned way.

Often, firms simply get too busy. In that situation, they end up having little choice but to firefight to get things done. When the orders are piling up, or a production line failure has put you behind, you have to react and think on your feet.

As a result, people start to cut corners, and pick up bad habits. This approach gets you through your busy time, but in the long-term can cause you problems. For example, the quality of your product can suffer, which results in more returns, and the loss of loyal customers.

Periodically reviewing each process will help you to eliminate these types of issues. Your accounts should be set up to show you how much it costs you to produce each unit. This allows you to identify potential inefficiencies.

2. Adopt new technology early

Not reviewing your processes can also lead to you working in old-fashioned ways. If you are not careful, your competitors can end up taking advantage of new technology. As a result, they get more done with a smaller workforce. Eventually, this undermines your ability to compete effectively, and you start to lose business.

3. Uncover easy profits

Using your profit and loss reports, you can identify which areas of your business are losing you money, and which are making you the highest profits. This information allows you to refocus your business to focus on promoting your highly profitable products and services. It also gives you the chance to consider discontinuing the items that are making you less money, or changing the way you do things to make them profitable.

4. Free up cash for your business

Many businesses struggle with cash flow. An awful lot of companies end up having to spend at least some of their profits paying interest on loans that they have had to take out. This is the case whether you are working out of Chester, or any other part of the world.

At least some of those loans are taken out unnecessarily. Periodically going through your accounts identifying raw materials or unsold stock that you could sell off is an easy way to free up cash that your business can use.

The key to making your business more profitable is your accounts. Whether you are a huge multinational with offices in Chester, or a small firm that has only been going for a couple of years, the information you will find buried in your accounts is invaluable.

If you are not already doing so, we strongly urge you to start using that data.

Posted by Peter
January 6, 2017

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