If Your Profitability Aim is Nothing, You’ll Hit it Every Time
So many people, just do things, without any real aim in the doing of it. If one has a plan, and a mission to accomplish, then there is a target to aim for.
However, aiming at nothing means you have no idea whether you hit your goals or not. You will have no feedback, and no way of improving what you are doing, right? If
you can’t track your progress, how do you know if you are getting better or not?
Here are just a few ideas to help you AIM FOR MORE PROFITABILITY:
Just for a start bad customer service can be a huge leak in your bottom line, and it’s a big problem that most companies/businesses have. The fact that only 4% of unsatisfied customers ever speak up, means that a lack of customer complaints doesn’t necessarily prove you are providing outstanding service.
Remember that it’s people who pay you, not the superfluous stats. That being said, it is important to focus on the customer service metrics that will have one of the biggest impacts on your bottom line.
A few examples of this are:
- Track Customer Service with Analytics
- Total Volume by Channel: The amount of enquiries you receive and how you receive them is incredibly important to track. One thing to note is, it may be worth your while picking the (channel or the way that the enquiry has come to you), that works best for your business. You may find you get better results and customer satisfaction through removing your phone number and just having email enquiries or vice versa. Whatever works best for you and your customers.
- Response Time: While speed is not what customers care about most, it still is very important. Slow service is viewed by customers as uncaring and incompetent. One important Metric to track within your data is your 24-hour response rate, or your ability to answer an enquiry within 24 hours. Let’s be honest when it comes to email support, customers will (rightfully) not want to wait more than a few hours, and certainly no more than a day, to hear back from you. Customers do have a bit of patience – Did you know that 50% of consumers give a brand one week to respond to a question before they stop doing business with them.
- First Contact Resolution Rates: Having the fastest response rate around won’t do you any good if your response quality suffers. This is especially true for customer complaints, as data shows that up to 95% of customers will give you a second chance if you handle their initial complaint successfully and in a timely manner.
- Understanding Your Balance Sheet
The first question you may ask yourself is – “Do I understand what my Balance Sheet is Telling Me About My Business”?
2 Points to look at:
- Working Capital: Is a common measure of a business’s liquidity, efficiency, and overall health. Because it includes cash, inventory, accounts receivable, accounts payable, the portion of debt due within one year, and other short-term accounts.
Positive working capital generally indicates that a company is able to pay off its short-term liabilities almost immediately. Negative working capital generally indicates a company is unable to do so.
- Amount of Equity you have in Your Business: Is the difference between what your business is work (your assets) minus what you owe on it (your debts and liabilities).
- It is the difference between what your business is worth (your assets) minus what you owe on it (your debts and liabilities).
Equity = Assets – Liabilities
In other words, the equity you have in a business is how much is actually yours, as opposed to the banks and any other creditors, if you were to sell it.
In fact, 80% of the balance sheets that I see have not been looked at for a long time, and are often incorrect.
- Compare your business financial figures and ratios with similar industry averages.
- Business Benchmark Solutions
- Profit target for your business
- Take the guess work out of your financial planning
- Information and data analysis help you to make competitive sound, strategic and financial decisions.
4. Capital Expenditure
- Assess how much current performance is at risk: Many businesses go headlong into something new without fully understanding the sources and magnitude of the risks they already face.
- Evaluate each project consistently: What’s needed is a more consistent approach to evaluating project economics and their risks, putting all potential projects on equal footing.
- Prioritize projects by risk-adjusted returns: The challenge is to figure out which projects are most likely to meet expectations and profit and which might require much more scarce capital than initially anticipated.
All of these things will help you to improve your Profit and get you closer to your dream – but remember you must have a target to aim for – if it is nothing you will hit it every time.
Email or Call me if you would like to you would like to do a FREE – “NEEDS” assessment to BENCH MARK – YOUR Business
