What Drives Your Business Growth and Profits?

Let’s examine some of the key drivers of growth and profitability.

1. Planning – where do you see your business going in the future? What level of profit and growth are you targeting for next year? The definition of insanity in business is doing things the same way and expecting different results. Without a plan to achieve your targets you are just hoping all the moving parts of your business sync together. Unfortunately, hope is not a strategy that delivers growth.

What is your vision for the business and how do you plan to get there? Without a roadmap all roads lead to nowhere. Having a business plan including financial forecasts is really the start of the process because it should identify what resources you need, the equipment and finance requirements. Will you launch new products and services? To achieve the forecast growth, what level of staff will you need?

Another part of the planning process should be a SWOT Analysis to ascertain your business Strengths, Weaknesses, Opportunities and Threats. Nobody saw COVID-19 coming but pandemics and snap lockdowns are part of the landscape and you need a contingency plan to deal with such events. As they say, Failing to Prepare is Preparing to Fail.

2. Technology has been a game changer in many industries and the rate of change continues to accelerate. Before the pandemic arrived a lot of business owners were contemplating some sort of digital transformation to keep up with their competitors and deliver a better customer experience. When COVID-19 arrived, remote working became an urgent priority to keep staff working. Businesses had to invest in technology to help staff transition from office-based to home-based employment and technology that was once considered a luxury became a necessity.

There’s been a massive shift in our daily business habits with face to face meetings replaced by video calls on platforms like Zoom, Google Meet, and Microsoft Teams. Going forward, these platforms may well become the default communication method for both internal and external meetings. Travel time has been slashed as a result and this looks like being a significant legacy of COVID.

Think about what technology you need to speed up your processes, improve productivity, reduce costs and produce better products and services. The right software can save time, help manage your inventory, reduce waste and generate repeat business with service reminders. It can also automate your marketing efforts. Most importantly, the right software lets you keep your finger on the pulse of the business and monitor all the key financial data.

3. Marketing – We suspected that the business model that relies almost exclusively on distribution of products through retail brick-and-mortar sites was under threat. With buildings and shopping centres closed through the lockdown, consumers quickly adapted and shifted their spending online. With consumers confined to their homes, e-commerce sales exploded and this massive shift to online sales is here to stay. To make the most of this shift in consumer behaviour it's time to review your website and make sure you have an e-commerce store to satisfy customer demand.

Increasing traffic to your site may be as simple as utilising the blog section of your website effectively. Chances are there is already a blog or news section on your website but nobody is posting anything, or only rarely. If you struggle for what to write in your blog section, head to a question and answer site such as Whirlpool or Quora and find questions related to your industry, product or service and use that question as the title of your blog post and answer the question. Visitors to your site appreciate this content and it will increase your SEO.

Engaging with your customers in this way and via social media channels is no longer optional with your prospects and customers living online. It’s fair to say, for the majority of businesses, your marketing could be the difference between Doom, Gloom and Boom.

4. Team – In Michael Gerber’s book, The EMyth Revisited, a key message for business owners was the need to ‘work on the business, not just in the business’. This message should resonate with every entrepreneur and you need to create a business that works independent of you. The purpose of your life is not to serve your business, it’s for the business to serve your life.

Sounds good in theory and the key is finding the right people to run the operational side of the business to free you up. Experienced and trained people who can follow your systems and procedures allow you to delegate tasks that you don’t have to do. Rather than manning the sales desk, phones or warehouse you can spend time on the key business drivers like marketing. Wages are often the biggest expense in a business for a reason and their performance can have a massive impact on your growth and profitability.

Leadership usually includes managing the team and innovating - that means providing the right tools so the team can perform their tasks efficiently.