You need to grow your business to generate the kind of income that you have
targeted to achieve. However, you may sometimes find that your business is
not achieving the goals that you set for it. You are not satisfied with the
direction that your business is taking. Your business is simply not
generating the revenues that you expected.
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One reason could be your failure to maximize your revenues. In fact,
there may have been a number of revenue opportunities that you have missed, or
downright lost.
Loss of revenues could stem from a number of sources. It may be due to
the lack of customer response to your marketing and advertising efforts. Or
customers may show up in your brick-and-mortar or online store, but leave
without making a purchase and instead shop (and buy!) from your competitor.
Your loss of revenues can be due to the high percentage of returned
purchases due to failed expectations and buyer's remorse.
Below are ways that can maximize the revenue opportunities for your
business:
Maximize
financial returns. There
are various ways of increasing your revenues - from looking at your cash
flow to your distribution system.
One way is to develop a variety of sales channels for your products. If
you are running a retail store, you can create an e-commerce presence and
reach the global marketplace through the Web. Or try the catalog. You can
sell also your excess inventories and returns in online auction sites like
eBay. Also explore the possibility whether your product can be carried by a
national chain or bigger retail network.
If you are rendering a service (e.g. web site designer, computer
programmer), there are a number of ways you can maximize returns for your
efforts. Evaluate the advantages and disadvantages of being paid on an
hourly or project basis. As a small business owner, you may not be able to
command high hourly fees, and some potential clients may want the comfort of
knowing how much they need to pay for a project upfront. Also weigh in the
benefits of working for one client at a time, relative to working on a
project that has a wider audience and multiple potential clients.
Maximize
revenue from existing customers.
It is easier to land a new customer than to retain an old one. In fact,
there is a strong correlation between long-term loyalty and revenue. You can
elicit trust and loyalty if you show that you understand your customers
better than your competition, and consistently deliver a rewarding, highly
satisfying experience through each and every transaction. You need to make
your customers' feel that you are giving them not only quality products or
services but opportunities for a valued partnership that they cannot find
anywhere. The key is to become your customers' strategic partner.
Price for
competitive advantage.
Revenue leakages can come from wrong pricing strategies. Your business may
be under pricing your products and services, resulting in the loss of
significant amounts of money. The problem often lies in an inadequate
understanding of your costs, which leaves your business at a competitive
disadvantage. Review your cost structure, and revise your pricing strategy
without overpricing yourself out of the market.
Maximize
employee contribution.
Many business owners have the vision and intestinal fortitude to turn a
shoestring business into a multi-million success; yet many do not have the
right skills to manage employees. Managed improperly, your employees can be
your biggest source of revenue leakage. Their errors and mistakes could jack
up costs; their discourteous service could turn away customers; and unhappy
employees translate to poor productivity and lost revenues.
Teach your
employees to care about your business.
Let them understand their role in the company and what the success of your
business would mean to them. They need to know what is expected of them with
regular performance reviews. Communicate with your staff regularly, open the
feedback process and let them know that you welcome their suggestions and
ideas. Give your employees the environment essential to helping them do
their best possible job.
Maximize use of
technology. One of the key
steps to maximize your revenues is to automate business processes. Evaluate
how and what kind of technology can make your operations faster and more
dependable while reducing costs, improving efficiency, and maximizing
revenue opportunities. Technology can help you effectively manage your
inventory and manage customer relationship. Technology offers tangible
benefits that can give your business the edge in a competitive marketplace.
Maximize tax
benefits. You should not
pay more in taxes other than what you need to pay. Yet many small business
owners fail to utilize their tax benefits to the fullest. With careful
navigation of the rules and proper tax planning, your small business can
maximize tax deductions, such as travel and entertainment. Seek the help of
a tax professional or financial analyst to help review your tax return
statements and find areas where you could save money.
However, the key step to maximizing tax benefits is through planning and
documentation. Get in the habit of recording every transaction on a regular
basis. Purchase an expense ledger or invest in accounting software to record
all expenses.
Maximize
marketing. Many small
business owners regularly market their products or services, yet fail to
evaluate the effectiveness of these campaigns. Understanding which marketing
campaigns result in more closed sales is often based on anecdotal evidence.
You can increase your revenues if you undertake measures to fine-tune your
marketing efforts to maximize the return on your marketing investments. You
need to take time to gather information and data on how well you execute
your campaigns, manage responses and track leads generated.
March 11, 2003
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