The Holy Grail of any entrepreneur is that elusive objective known as profitability. The formula to achieve this goal is pretty straightforward: ensure that revenues exceed expenses. The economic climate had previously allowed for a plus-side bottom line to be attainable. Following a robust 2019, there were high expectations that things would continue along a positive path.
Virtually overnight, survival replaced profitability and businesses needed to shift focus. The uncertainty that followed this rapid change has created unparalleled anxiety among business leaders around the world. Tough times? You bet. Will they last forever? Thankfully, no. Normalcy, in one form or another, is somewhere down the road.
The Time to Act is Now
As we adjust to a “new” normal, businesses should be prepared for a wide range of outcomes and develop a handful of scenarios to move forward. This includes revisiting forecasts for sales, expenses and cash flow, and making the necessary adjustments to maintain a lucrative business model. Business leaders must ask themselves, "what changes should we make now to come out even stronger?".
Six Strategies to Become More Profitable
- Analyze information on a larger scale.
Goal setting is not only defining your objectives; it requires real-time data, so you always have the latest, most accurate view of performance to make confident projections. Information is power, and having a comprehensive view of data that updates as the environment changes, enables leaders to pinpoint patterns and connections between successes and setbacks.
- If you can automate a process, do it.
Businesses that invest in automation are proven to significantly reduce their cycle times, close their books faster and streamline the quote-to-cash process. A sophisticated business software can help fuel growth by streamlining time-consuming processes and providing real-time information that gives business leaders the direction they need to make smart decisions.
- Nurture your existing customer base.
Building upon your established customer relationships is an efficient way to generate new revenue. If your organization isn’t cross-selling and upselling existing customers, you could be leaving money on the table. A good starting point for organizations that want to maximize these opportunities is frequent communication with customers, identifying their unmet needs.
- Explore new markets and revenue streams.
Seeking new opportunities for your existing product or service line can help diversify revenue streams. You can increase your company’s profits by adding more of a selection to its product or service base, or by identifying and targeting adjacent customer segments. Plus, increase exposure and visibility to a broader range of customers by capitalizing on more offline, online and direct channels.
- Explore global opportunities.
Think big and act boldly. A worldwide market can extend the sales life of existing products and reduce dependency on the domestic market. It may also grow profits based on economic changes or demand cycles that differ around the globe. This could be an opportunity to launch new products that may not have applied to domestic customers.
- Protect yourself from losses.
By fine-tuning your tax, regulatory, and compliance activities - losses due to fines, fees and penalties can be dramatically reduced. ERP technology can streamline tedious financial and human resource tasks and ensure better overall compliance. Cloud-based software that is updated automatically can stay on top of tax and regulatory changes. This can relieve growing businesses from the hassle and expense of updating their systems and processes.
If your business finds it challenging to leverage the six opportunities outlined above, it’s time to explore a cloud-based solution. Make the switch to a modern, cloud-based business management suite that will easily handle CRM/Sales, Marketing, Financials, Inventory, E-commerce, and just about everything else necessary for the survival of your business. NetSuite from neo3 is the answer because, for twenty years, neo3 has employed its resources, experience, and products to propel businesses toward greater profitability.
Our team has stayed committed to helping clients maximize their profit-building capabilities, especially over the past few months. We’ve also onboarded new clients looking to adopt revenue-generating strategies by transitioning to a modern, cloud-based business management suite. Profitability starts with information that only a robust Enterprise Resource Planning (ERP) software can provide.
