Without a steady stream of revenue, a business cannot survive. Many owners are having trouble with the costs necessary to running their business simply because of bad habits. But once you identify the biggest culprits of lost income for a business there are easy solutions you can implement!
Too Much Overhead
Some businesses tend to lump their costs together. When broken up, however, you will find that overhead costs count for most of your associated costs. When selling a product, it is critical you markup for at least 20% to cover overhead costs. If your overhead costs exceed the 20% markup, then it is time to examine how you are running your business functions. Too many employees, excess supplies, and excessive operating expenses are problems to watch out for that can contribute to a loss for your company’s profitability.
The productivity of your employees has an impact on your overall profit as well. Especially when you are paying individuals by the hour, the number of units they can produce within that hour will affect the overall cost per unit. The Kanban is a scheduling system for lean manufacturing. It helps you visualize the process and workflow of your business to identify potential bottlenecks in your process. Once identified, you can then fix issues and optimize time wasted. Using the Kanban system, eliminate downtime and overproduction at your business.
Lack of Vision
When your company does not have a business plan or vision in mind, individuals will spend a lot of time doing work that doesn’t benefit your business. Employees and directors need a vision and a purpose for the company to set realistic goals. Goals are what help you achieve your production, profit, and personal objectives. Without goals and associated plans to reach them, you cannot actively increase your income. By setting a clear vision for your company with financial, logistical, motivational, and time specific objectives, however, you create a unified front for your business. With a unified front, customer service, business operations, and income will all increase.
For many businesses, a trial-and-error process is common to understand what brings in the most income and what does not. For some, however, the time it takes to figure out their secret ingredient is detrimental to the lifespan of the company. Figuring out what you have to offer and how you can increase your income is essential to your company’s success. When looking to increase your income, avoid too much overhead costs, wasted time, and a lack of vision!
Read this next: How to Create Effective Content Targeted Toward Young Consumers
As always, if you need any assistance with your branding and digital marketing, our MGR Team will be happy to chat with you one-on-one. Use this link to contact us and set up your free consultation.
Thank you for reading. Until next time, this is Manuel Gil del Real (MGR)