Small Changes – Big Impact!
We believe that most business owners are interested in making a success of the company by providing the best service possible to customers and having a profitable business in order to continue servicing those customers well.
It is interesting to note that making small changes in certain areas of the business, has a massive effect on the success of it. From a pure business perspective, it is the focus on the financial statements, specifically the profit & loss statement where you can identify the areas that need improvement.
It is also about understanding the “how” behind the figures like where does the income come from, analysis is key. Let’s look at the areas where making those small changes could have a major impact. For example, increasing the number of customers, you can do two things. Firstly, increase the number of leads through your marketing and secondly, increase your conversion rate in bringing them on as customers.
With regards to increasing turnover, it is about increasing your customers spend on what they both need and want and / or increasing the times you engage with them. By doing both of these the turnover will increase.
Finally, when it comes to increasing profitability, it is about increasing the difference between your income and costs. You can increase prices (easier said than done in the current environment, funny how we accept others doing it though) and / or reduce costs.
Now this may seem obvious but in our experience not enough small businesses focus on their financial accounts. Sure they have an accountant but how many business owners just sign the end of year figures and file them? Also there is one thing that surprises many people in all types of businesses, is that by simply achieving a 10% increase in each of the areas mentioned above (with maybe reducing costs by only 5%) your gross profit would increase by a massive 77.4%! So by breaking it down and really focusing on making small changes in each area, the impact is very big when you get to the Gross Profit line.
We have to remember of course, to make these changes whilst still delivering excellent goods and services to our customers.
Getting business help would assist you in identifying where to make these small changes. Ideas to generate those 10% or 5% increases or savings are not as elusive as you might think. You will already have a good feel for what works now, so simply jotting those down is a good start. You could continue by asking each team member or other associates to come up with their ideas in a team meeting for instance. You may be surprised how many quality ideas that can be generated and developed around the table. Also, by asking them, they will feel more engaged with the success of the business and more motivated because; “Wow, they’re asking me for my ideas!”
Even if you only implement a handful of new ideas and changes, it will have a bigger impact when you add them all together and then see for yourself the effect on the Gross profit line. Small Changes = Big Impact.