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It is important to make sure you have the right processes and core components in place to ensure that your business will not just survive but flourish in the coming year. If not taken into consideration, it can hurt you where it hurts the most—in your pocket. Consider the following advice.
Analyze your products. Too often we get blinded by revenues and don’t look at the products themselves to see whether or not they are really generating a true profit. Take a look at your product offerings. Some might be generating a tremendous ROI while others are doing much less. It might be worth taking a product off the market if it’s not doing so well, or putting more dollars into the ones that are. Look at your products granularly and understand the costs associated with each.
Analyze your vendor relationships. Take into consideration things such as payment terms, volume, and discounts. Renegotiate with your current vendor or look for alternate vendors to see if they offer a better value-added service. Chances are your current vendor will not want to lose you and will do what it can to keep you as a customer. Quite possibly, you’ll end up with exactly who you had, but with better contract terms.
You are only as good as your customers. Understand the costs that your company incurs when providing service to your customers, and you might find that you are losing money on some of them. Don’t be afraid to look at customers that are not profitable and make them profitable. Renegotiate your contracts and adjust what you offer. Analyze each client individually on the expense side. Also, make sure you are utilizing your products internally. Chances are that if you think the product can be improved in some way, the client might be thinking that, too.
Chief Operating Officer
Want to improve the way you run your business? Entrepreneurs, academics, and consultants from diverse industries offer practical advice on a variety of topics each business day.
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