I’m going to give it to you straight.
Revenue is important! But it means nothing without profitability.
Sales matters! But not if you have so much debt you can’t even pay yourself a wage.
Businesses need to grow! But not if it’s giving you more pain and stress than money in the bank.
So what’s the secret sauce?
Making sure you focus on profitability.
Profit is where the magic happens. It’s what gives meaning and power to revenue, sales and business growth.
Here are 3 simple things you can do right away to increase your profit immediately.
1. Get really clear on where you’re spending your time aka what’s the ROI on where you spend your time?
I remember my very first Sales Director role. I was so excited about the red Chanel lipsticks we’d bought our clients for Christmas gifts that I got caught up in the detail of packaging them up and sending them off.
As a novice (and possibly overexcited new senior leader who wanted to do everything), there was something I failed to realise.
If I was spending my time on tasks that our EA could do, this meant I wasn’t spending my time on tasks a Sales Director needed to do.
I could’ve been using that time to coach and support my team, create sales strategies, liaise with top tier clients, build relationships with key stakeholders.
I’ll never forget the look on my boss’ face when she walked into my office to see me up to my eyeballs amongst Australia Post packaging and red lipstick trying to match envelopes with addresses.
She asked me straight out – what my hourly rate was. And then she asked me if I felt it was worth the investment of that hourly rate to be organising postage for our Christmas gifts.
That was a lesson I’ll never forget and a hugely valuable one that has served me as a business owner since.
So I ask you..
- What tasks are you spending time on that you know deep down you could outsource?
- What’s your hourly rate (assuming of course you’re charging what you’re worth 😉 and if you’re not, keep reading to point 2)?
- Is where you’re spending your time giving you a good return on investment (ROI)?
- What could you be doing with that time instead that would make a bigger impact on your biz?
2. Charge what you’re worth
Here’s the thing. There’s a lot of undercharging going on out there.
The double whammy of combining a sales conversation and increasing prices can be too much, resulting in an avoidance of both sales conversations and increasing prices.
Service-based businesses can particularly struggle with this as it feels exceptionally personal to ‘sell’ yourself.
You’re not alone. We’ve been there.
What can you do?
There’re some practical things like
- Do some market research to get a feel for the market value of what you’re providing.
- Consider how long you’ve been providing this service and when you last increased prices along with your expertise and experience.
- Map out a communication plan and consider the rollout to both your existing and new clients so everyone still feels taken care of (depending on your business, you can increase existing clients incrementally or set a date from which they’ll be charged the higher rate)
And then there’s the inner work…
- Dig deep into your mindset and uncover what limiting beliefs are holding you back
- Be aware of, and change, your inner dialogue – what’s your inner critic telling you?
- Work with a business coach who can help you discover what’s really holding you back and provide strategies to create the change you desire
- Always remember your external success is limited by your internal progress
3. Use a clear and simple sales process.
Many business owners (especially women) will avoid sales or don’t believe they have to be (or are) good at sales.
Having a good sales process in place has several benefits:
- Saves you time
- Helps increase conversion rates of a prospect to client
- Provides a better client experience
- Qualifies (in and out) the best type of clients for you to work with
All of these benefits have a direct impact on your bottom line. On your profitability.
Top Tip: a good sales process takes the ‘thinking’ out of it for you. You can organically follow a process without having to think of the next step each time. Aaaagh the gift here is giving you back some brain space to focus on other cool things in your business.
Myth Busting: You don’t need a big (or any size) team to have a sales process in place. Even if it’s just you in business, it’s worthwhile.
Despite having decades of experience in sales, I still had a sales process that I used for 5 years when I was a solo business owner.
Remember: Simple is good. Tailored to your business is even better.
The most important message to take away today is to make sure you get started on finding ways to increase the profitability of your business. And don’t forget to put a metric in place to measure each month, quarter and year to show how you’re tracking with profit numbers.
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