How To Grow Or Rescue A Business
One of the best pieces of advice I got when starting my business was "sit where you can see the money!" with that in mind here are Six Ways To Make More Money. Do you remember watching "Troubleshooter" with Sir John Harvey Jones? The BBC had come up with this brilliant wheeze of asking the ex-chairman of ICI to visit struggling companies and give them the benefit of his business advice.
The programmes followed a predictable pattern where Sir John would turn up and then reel in mock horror at what he found. There would be a shot of him deliberating in the car and then the climax when he announced his findings to the, usually slightly bemused, directors. The thing was, he only ever told them to do two things. And he gave everybody the same two pieces of advice.
What it came down to in the end was:
- Increase your sales revenue
- Cut your costs
The details of what to do might have varied but what gave him such clarity in dealing with "stuck" situations was that he kept his vision firmly fixed on these two simple remedies. So here's a suggestion, based on this model, of Six Ways To Make More Money. Keep this checklist with you and run through it about once a month - it works for your own business and for your personal finances as a good reminder of how to make your budget go further.
Three Ways To Cut Costs
| Save | How |
|---|---|
| Pay less for things, people and equipment | Just today I heard a personal finance guru claim that most of us pay 30% too much for things. With two days work looking at gas, electricity, telephone and internet charges plus weekly shopping bill you could save up to 30% of your monthly spending. Imagine that, equivalent to a 30% pay rise in two days. In you business, give yourself regular profit boosts by paying less for non-essential items |
| Use less | What can you use less of - printer ink, petrol, stationery? The secret here is diary management - travelling off-peak and bunching your trips together for example. This also includes keeping an eye out for free resources like the pens and pads that hotels and meeting venues often give you |
| Waste less | Where is money leaking away in your home or business? Where can you reduce, recycle, reuse? Even something as simple as printing on both sides of a piece of paper before you throw it away can save you money |
Three ways to increase revenue
| Make | How |
|---|---|
| Sell more! | My first job was selling electrical goods and the manager was always going on about the second sale - offering a pack of batteries or something small to go with the first item. He knew then, what I know now, that when someone has bought once, they will usually buy again AND it's a lot cheaper to make a sale to an existing customer. What would it take to increase sales? In contrast to the advice above, selling more may mean spending more on things that really matter, things that the customer sees or experiences. A simple example for anyone who runs meetings would be always using nice, wet markers that leave a highly visual lasting impression. |
| Charge more | You can always nudge prices up 10% unless your business is highly price sensitive or tightly regulated. Always aim to be as expensive as you can - Stella rather than Tesco's value range. |
| Diversify | What else could you sell? What problems could you solve for people? What could you do that the competition can't do? |
Do it regularly
In my experience, most of us wait until there is a crisis before we take hard decisions about revenue and costs. A sudden withdrawal of resources - a takeover, a key commodity price rise, losing our job etc. will suddenly energise us to review our spending.
It's in our nature to cling to what is known and comfortable - same old processes in the same old way. You know that change is always just around the corner so why wait? Keep the checklist with you and review it regularly - you'll be ready for the changes when they come.
- Pay less
- Use less
- Waste less
- Sell more
- Charge more
- Diversify
I've been giving this checklist to start-up business for four years now and we are yet to find a way of making money that does not come back to one of these six. Let me know if you think of one.
Featured Link:
Martin Lewis has a site packed with tips and advice about paying less and gaining more value from your business and personal spending. MoneySavingExpert
