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5 Practical Ways to Increase Profitability

If you want to stay in business, you obviously need to focus on the bottom-line. If you’re only looking through a financial lens, however, you may soon find yourself frustrated and overwhelmed.

Why?

Because your bottom-line will eventually stagnate if you’re not paying attention to the other aspects of doing business.

Here are 5 practical ways to rethink how you’re running your company.

1. Examine Your Culture

There’s a lot of talk about culture these days, but many business owners rarely take the time to explore what culture really means. Culture is the attitudes, beliefs, practices, values, expressions, and untold stories that live within the organization.

Yes, a culture exists regardless of whether or not we set out to create one. Even so, it’s foolish to assume that the existing culture of your company is what it needs to be.

Wise business owners are intentional about the culture they want to create. Start by listing all the ways your existing culture is played out on a daily basis. What do your employees think and believe? How do they respond to daily challenges? How do they relate to one another? For example, is your management team spending too much time on conflict resolution? Do you have a high turnover rate?

Once you’ve determined what’s working for or against you, you can then take the necessary steps to redesign the culture. Imagine what it would look like to create a meaningful, productive, and profitable work experience for both you and your employees.

2. Develop a Clear Strategic Initiative

If you’re a small business owner, you may not necessarily have the need for a complex strategic plan. You must, however, have a clear strategy for how you’re going to increase your business. This is more difficult that it sounds because most business owners are so busy handling the day-to-day operations, it’s difficult to take time out to work on the business.

If you don’t have access to a professional that can help you develop a clear strategy, start by focusing on one specific goal that will either help your company grow or will make you and your team more efficient. This can be a quarterly or an annual goal, and it should be linked to profitability in one form or another. Once you’ve identified the goal, you’ll want to determine the systems and processes that will help bring the goal to fruition. A strategy isn’t a strategy without the systems and processes to support it.

3. Implement Supporting Systems and Processes

The systems and processes required to fulfill the strategy and to ultimately increase your bottom-line don’t have to be complex. You may just need to reevaluate your hiring practices or develop a new criteria for how you train existing employees.

Whatever the scenario, the important thing to remember is that you cannot simply impose a new culture or a strategy on your team without the appropriate supports. Leaders often make the mistake of assuming that their employees know how to implement changes to the company’s infrastructure. Any change in how people do business requires a system or process that allows them to adapt to this new way of doing things. You can’t just tell people what to do, you must train them on how to do it. The tighter your systems and processes, the easier it will be for your people to do the work-at-hand.

And, don’t worry. You don’t necessarily have to come up with this on your own. In fact, you really shouldn’t. Involve the team in the development and implementation of the necessary systems and processes and watch how this level of collaboration impacts your culture and your bottom-line.

4. Invest in Leadership Development

Culture, strategy, systems and processes—all meaningless excuses for doing business if you fail to commit to the people involved. In fact, I’ll be so bold as to say that failure to invest in leadership development, for yourself and others, may be the biggest mistake business owners make.

To be blunt: You can’t grow your business if you don’t grow your people. Remember, leadership is not about a title. It’s a place to come from, not a place to get to. Your employees will never be empowered to take on more responsibility or to resolve complex issues if they’re not prepared to think and act like a leader.

If you don’t feel equipped or have the time to get them there, consider alternative ways to make sure that they have the opportunity to engage in a leadership development process that will help you and them live out the full value of your culture and strategic initiatives.

5. Eliminate the Dark Horse

Every organization has one or two dark horses that block the success of the company. A strong leadership development process will flush these individuals out if you don’t already know who they are.

The point is to recognize that these people are impacting your bottom-line in one way or another.
Business owners often hang on to the dark horses for a variety of emotional reasons. Eliminating someone from the team is never an easy decision, but if you stay focused on the desired culture and the strategy to increase your business, your systems and processes should support you in making such tough decisions.

Here’s the formula to increase profitability:

Culture + Strategic Initiative + Systems & Processes + The Right Leaders = Increased Financial Results

It’s not too difficult to see that many of us start with financial results and stumble through the rest of the story.

Try reversing your game plan. I can promise you a renewed sense of passion about the daily aspects of taking your business to the next level. Just do it and watch what happens!

 


If you want to learn more about how your experience of money is impacting your potential for health and well-being and greater success in your life, Sharon's book, The Pursuit of Time and Money: Step Into Radical Abundance and Discover the Secret to a Meaningful Prosperous Life, is available for pre-order now.

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Published by Sharon Spano, Ph.D. June 6, 2017