“If you think small things don’t make a difference, try going to bed with a mosquito” Anita Roddick, founder Body Shop International.
This series of articles is looking at how we get the biggest impact from our small businesses.
This week I am focusing on the money – making it, managing it, understanding it, profit and loss, budgets and cashflow, break even and financial systems.
We are all in business to make money. Without money we cannot grow our business, employ more people, achieve our goals, support our families and so on.
This week and next week my focus is on increasing our profits.
Essentially there are three ways to do this:
- Sell more
- Cut costs
- Increase prices
Firstly, selling more – the easiest people to sell to are our existing customers. They already know us and like to do business with us. It is up to us to turn them into regular customers who spend more money with us. We need to know why they buy from us; what they most need and what else would they buy if we provided it! In other words, we must talk to our customers – not a heavy sell but a genuine conversation to see what else your business could offer them. Don’t just rely on customer feedback forms or on-line feedback – personal contact is so much better. You might not be able to meet all your customer’s needs but you will be able to meet some and maybe you will be able to help them get the other needs met elsewhere. The next easiest category to sell to are people you know, and people known to your customers – if they like what you offer and the way you offer it then they will sell for you. They will become your own personal business fan club! Think about having special promotions (not sales) or evenings to which you invite selected customers. Maybe a focus group or two of existing customers where, in return for refreshments, you pick their brains!
Selling to complete strangers is the hardest thing to do and probably gives you the least return on your investment. Think twice about paying for advertising or cold calling. This requires a lot of confidence and takes a lot of effort – exhaust all other avenues first.
Networking is a good way to promote yourselves – joining business groups or your local Chamber of Commerce or Rotary Group and making sure everyone has your business cards and a small interesting brochure which outlines what you do and how to contact you.
If you have a website get advice on how best to promote it to make sure people are finding it and staying on it long enough to become interested in what you have to offer them.
Think carefully before you introduce new products or services into your business – do your customers really want them and can you adequately support them? Will these new offerings really add value to your existing business? Remember the goal here is to increase your profits not your costs!!
Finally, there is no point in having a good business but it being a well-kept secret! You are in business to make money – if you don’t you will go broke and not be able to do anything of the things you had in mind when you started your business. Whenever you do anything new, promote it as widely as you can to the people you believe will be interested.
Next week I will explore the other ways of making money – cutting costs and increasing prices.
Small businesses have the potential to make a big difference but this will not happen by accident. We must plan for impact; we must prepare for impact; we must keep learning.
If you have examples of small businesses making a big impact then I would love to hear them – email me some brief details and I’ll get back in touch with you.
There are thousands of small businesses operating all over the Pacific – by celebrating success we will encourage more people to climb their mountains – by sharing stories of success we will all learn and grow and realise what a difference we can make – just like the mosquito!
Chris Elphick is Partner in Breadfruit Consulting, supporting the development of a range of businesses and organisations in Melanesia and other parts of the Pacific. He is an experienced trainer, coach and business mentor and has years of experience of working with Small & Medium Enterprises. He and his partner Hazel Kirkham live in Vanuatu and are involved with tourism operators and their businesses in several Pacific countries.
Breadfruit Consulting have partnered with Fiji Entrepreneur to develop mentoring services for new and young entrepreneurs.
If you have an issue or query related to this article, please contact Chris at firstname.lastname@example.org or text to +6785500556