What if

Your Business
Could Be
Doing Double?
What if Your Business
Could Be Doing Double?
Forget about how good your mission statement, vision or culture look for a second. Show me
your financial overview, and I can tell you exactly what's limiting your company's long-term
growth potential. As a growth expert that's augmented the fortunes of hundreds of companies
across the globe, I can tell you that there is one leading driver that'll enable your business to hit
multiples on your ROI, and it starts with profit optimization. The way to think about growth is
that you can't always win, but when you do, you need to have the right model and processes to
maximize those wins, while minimizing the damage everywhere in between. Jay Abraham, a
well-known business mentor was once quoted as saying that “the secret to building your
vision is to master [the] art of optimization. Optimization is learning how to maximize, not
minimize, every asset”. The net effect is that you buy enough time to allow for compounding
over business operation. That simple concept alone can help you rethink and implement
growth planning in a very measurable way.

No matter how good you reckon your business to be, if you don't have a bullet-proof
foundation that can facilitate this self-compounding effect, then there's always a risk of
stagnating, fizzling out, or outright losing to a better competitor over time. A 2015 study
published in the The Royal Science Interface journal found that for 25,000 publicly traded
North American companies, from 1950 to 2009, the mortality rate was 10 years
independent of company age or sector. That means that if you run a company, sleep with
one eye open. Companies bigger and better funded than yours die, and all the time. For that
reason, the most powerful businesses rely on mentors or consultants to infuse their
organization with forward thinking ideas and bespoke business models to keep them ahead of
everyone else.

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The only way to safeguard against poor performance (or outright bankruptcy) is with high
performance ideas and customized business models. Our team has delivered powerful
transformations across 532 different businesses, and we're going to share 5 tangible steps
to help you improve your company's margins right now:

1. Raise Your Prices (Do's and Don'ts)

Raising prices may seem like an obvious strategy to boost earnings, but it can be an issue for
small businesses. If you offer a service, you may think that raising your prices will offend your
clients and force them into seeking an alternative provider. You may lose some clients to your
competitors. But if you are providing an excellent service, you'll keep most of your clients (and
the right ones to boot).

It also makes a positive statement about your business, provided the value is there. On the
books, your profits will increase even if your revenue stays static, which is a net positive from
an investment and accounting perspective too.

On the other hand, If you're a retailer, you may feel that your products are more sensitive to
price rises. In that case, you may need to be more creative by offering tiered pricing to reflect
the needs of different customers. Alternatively you could build your rates in small increments
over a period of say, two or three years. When your core product or service stays at a fixed
rate, you can gradually increase the price of the extras or add-ons, which may not be as price
sensitive.

Here are some powerful tips for increasing your prices without upsetting your clients:

● Timing is critical – It's best to raise prices when your clients and customers are
satisfied with your product or service.
● Give clients something extra – You customers are more likely to accept price
increases if there is something extra for them. This extra may be a product or service
that doesn't cost you too much but has a high perceived value. An example would be
free gift-wrapping, eBook, gift or individual consultation.
● Reduce quantity– Confectionery manufacturers have used this tactic in recent years.
A restaurant may, for example, cut their $25, twelve-ounce steak down to an eight-
ounce steak for $20.
● Offer alternatives – If you sell a 10-pack of batteries for $10 and want to raise the price
to $12, create some alternative packages of say, five pack for $7 and a three-pack for
$5. The 10-pack will then appear to have a higher perceived value.
● Add improvements – Customers are often alright with price rises when there is an
improvement in the quality of an existing product or service. Developing this strategy
could mean a new menu item for a restaurant using existing inventory, for instance.
● Develop a new market – It is always good to target alternative markets from time to
time. A more affluent market area for your product or service would enter at the higher
price. This strategy may offset any customers you may lose.

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2. Cut Costs (Without Upsetting)
One of the most critical (and difficult) aspects of operating a successful business and
increasing your profits is keeping expenses at bay. Sometimes there are obvious substantial
savings to be made in a particular area, but the real magic is in finding savings through the
myriad small items over time. Here are some excellent areas to consider cutting costs:-

● Vendors - Talk to your suppliers frequently about special offers, there may be savings
available just by asking for them. When you are considering buying new equipment,
also look at the running costs.
● Check your key suppliers to determine where you can save money. Are they offering
you the best price on the market at the moment? Is your turnover with them sufficient
for you to justify asking for special discounts? Can you get better payment terms? Can
you change suppliers for particular services like payroll or courier for example? During
a year, these savings add up!
● Utility Providers - Have you checked your internet provider, web hosting company,
electricity bill, phones, recently? There's much competition in these markets and
equally good services are available at lower costs. Most utility providers depend on
customer apathy to make their profits. If you don't check them every year, you're
probably paying the highest tariff.
● In-house or outsourcing - Every time an employee moves on from your business, it
creates a useful opportunity to re-evaluate the vacated position. Do you still need to
replace that person? Can the job be absorbed by spreading it out over other
employees? Can you outsource that job? You need to be operating a lean and efficient
business.
There are sites like Fiverr, Upwork, and DesignCrowd that can provide many of the
administrative, marketing and creative services that your business needs. Business
owners can use virtual assistant services for social media, blog and article writing,
press releases, spreadsheet work, and accounting and most are significantly cheaper
than employing your own staff.

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 ● The right supplies and equipment - If you buy a new printer, for example, consider
the long-term cost of the print cartridges or toner. There can be significant savings by
getting the right model.
● If you are leasing your printers and computers, consider buying them. If you own your
equipment, consider leasing. Find out which is the cheapest option for you. Take time
out to conduct price comparisons, and you could make significant savings. Don't
overlook opportunities to make minor savings. It all adds up. When it is your own
business, every dollar counts!

3. Increase Your Average Order

As your business grows, you'll likely introduce new products and services, but how would you
encourage your customers to order more products, and order more frequently? Here are
some ideas:

● Free Delivery for a Minimum Order Value: Customers love free delivery. A customer
will often add items to their order or shopping carts to take advantage of a free
shipment.
● Start a Loyalty Program: A good loyalty program encourages customers to keep
coming back. The key to persuading customers to join a loyalty program is to offer
valuable incentives. An incentive could be early access to new products, or to offer new
products at a discounted price. You could offer a $50 voucher or an extra discount once
your client has reached a particular status.
● Target Clients by their buying patterns: If you have an Amazon or a Facebook
account, you will have experienced this type of marketing. Have you purchased a book
through Amazon? How long did it take for them to let you know of the other titles by the
same author? Or if you've looked for a particular topic on Google, then the next time
you open your Facebook account, a targeted ad appears right before your eyes.
Learning proper targeting with a simple Google search can have a tremendous ROI on
your sales activity.
● Upsell and cross-sell products: Upselling is sales technique where you get your
customer to spend more by introducing an upgraded (more expensive) version of a
product that they are looking to buy, or recommending a higher quantity. Sell your
customer on the features and benefits of what you're offering. As long as your clients
are getting good value for money, they'll be happy. Cross-Selling is where you add a
product or service to enhance your client's user experience of a product they already
have. For example, recommending a belt to go with those pants, or a tie to go with that
dress shirt, or oven gloves to go with the new set of cooking pots. Simply put,
customers appreciate cross-selling!

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4. Cut Waste
The old motto of, “buy what you need and use what you buy.” is relevant here. A quick Google
search of “company wasteful spending” can be jaw-dropping to say the least. Here are just a
few ways you can put a dent in waste:

● Start using energy efficient appliances: Install energy efficient bulbs (seriously).
Changing to power efficient LEDs could save 75 off your lighting bills which would
mean considerable saving for companies large and small.
● Pay your credit cards on time: Why would you want to pay credit card companies
outrageous interest rates on relatively small amounts?
● Trade shows: Trade shows are an efficient way for small firms to spread the word, and
an opportunity to network with like-minded individuals. But be aware that there could
be a diminishing return on the money you put into trade shows if you attend too many.
Make sure to check the return on investment by counting up the profit on any new
orders and working out the value of new customers. If you want networking, there are
plenty of opportunities for the cost of a good breakfast.
● Bad advertising decisions: How much did you pay for Google Adwords? This
marketing strategy can be a drain on advertising budgets if you don't fully understand
the system. Also, keep an eye on new brochures and leaflets. Are they essential? Many
end up in the bin (especially after a trade show). Are you investing in marketing that
doesn't work? Or buying leads that your sales team don't have time to follow up?
Asking the right questions is sometimes enough to see an instant ROI.
● Track expenses: If you think that you're too busy to check expenses, think again! You
can always find ways to cut everyday costs.
● Outdated inventory: How much outdated stock do you throw out every month? Is
your stock taking too long to sell and therefore going to obsolescence? Discard,
donate, or distribute that inventory in ways that can either make your company look
ders and make sure you have the right coverage from a competitive company.

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 philanthropic, or not look environmentally wasteful. You can still profit even if you don't
make a sale sometimes!
● Overpaying Insurance: Insurance is a necessary expense for businesses, but is your
protection cost-effective? Are you insuring against incidental losses that you could
handle yourself? Cross-check multiple providers and make sure you have the right
coverage from a competitive company.

5. Streamline the process

The faster you can turn around the time it takes from order to delivery, the lower your overhead
costs. This speed means improved profit margins, and you can take on more work in the same
period. Are you using outdated methods that were good ten years ago but can be improved
now? Can you shorten part of the process, automate or work from templates?

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Bonus Tip: The 80/20 Rule:
The Pareto Principle (also known as the “80/20 Rule”) is a tremendously powerful economic
insight that postulates that 80 percent of your revenue is generated by 20 percent of your
products or services. Observing this rule to keeping a check on your gross profit margin is
essential. Some of your products may not be adding value to your bottom line. In such case, it
may be costing you money to keep them in stock, so you'd need to consider eliminating them.

To look at this rule from another angle, we could say that 20 percent of your customers
generate 80 percent of your business income. If you can identify your best customers, you
have a better way of increasing your profits. Less active customers can take up a lot of time in
support, or they may be slow payers – which all cut into your profit margin. Simply put,
overworking your business doesn't necessarily make you more productive or profitable (but it
can make you more exhausted and lead to stagnation).

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Conclusion
Only when you allow your business to be guided by the best ideas, practices and modules, will
you see the most powerful performance and growth. Understanding how optimization and
compounding dynamics enable you to get a lot more with a lot less is the way to make a proper
moon shot with your business. Moreover, being mindful that there could be a instant dividends
in simply addressing current expense items is a logical starting point. As the old saying goes:
“look after the pennies and the pounds (dollars) will look after themselves.”

If your businesses hasn't passed its 6 or 7-figure mark, or if you aren't sure how to push to the
next level, then you need transformational perspectives from outside of the box. Crestpoint
Consulting invites you to share your business challenges with one of our top performing
consultants for some quick ideas with an instant ROI (and at no cost). If you’re serious about
accelerating business growth, connect with our world-class business thinkers and let’s do
something amazing together.

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Let's do this.

Ask a
Consultant

Created by Jennifer Chen, CEO of CrestPoint Consulting.

CrestPoint Consulting is an international performance consulting firm, whose team is

passionate about providing transformational ideas, analysis and customized business
modelling. Jennifer works with CEOs, Founders, Management and Professionals to realise
their corporate vision, goals and objectives via strategic coaching and mentoring that
transfers. The firm also provides contract and full-time CFO and COO services and
management fill-in roles.

As a growth expert, Jennifer is passionate about working with companies that provide unique
products and services that add value or solve teething problems in a measurable way. Her
diverse experiences in business growth strategy, people management, cash-flow
acceleration and rapid-profit execution enables her to effectively turn companies around, or
scale up in a fraction of the time. If you're looking for your next big win, say hello and let's
exchange some big ideas.

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