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5 strategies to increase your business profit that don’t involve sales

It is a common misconception that when your business is not making enough profit, the low number of sales are to blame. Business owners are often too heavily focused on sales and neglect to review the expenses of their business. Paying thorough and ongoing attention to your expenses can reveal the areas where money, resources or time are being wasted. Making the necessary adjustments can dramatically increase profit without any difference to sales numbers. Here are six areas where small businesses can review their expenses and improve their bottom line.

1. Optimise production levels

Overproduction looks different in different businesses. In manufacturing businesses, it can be a matter of ensuring that the amount being produced is in line with the demand and the rate of sale. Producing too much can lead to unnecessary cashflow problems related to the cost of storage and production itself.

When providing a service, overproduction refers to having too many staff members rostered on during quiet periods.  This can be avoided by taking an active role in ensuring that clients, jobs and appointments are organised into a timeframe that is set by you.  This practice is assisted by managing the expectations of the client regarding commencement dates, duration and completion of the service.

2. Minimise delays

Delays can occur in both the manufacturing and service industries. In manufacturing, this problem usually arises as a result of the processes around delivery and subcontracting.  This has a knock-on effect on customer satisfaction and impacts on your running capital.  Again, clear communication about timeframes and prioritising the adherence to processes in this area can make a noticeable difference to overall profits.

In the service industry, trying to gather the necessary information from clients can be a time-consuming job. It is important to have controls in place that enable information to be gathered in a timely fashion.  Training staff to prioritise this efficiency will improve the workflow of your business.

3. Improve efficiency

Inefficient processing can have a huge impact on the cost of production. However, it is easily avoided by paying close attention to three main factors. Firstly, having the right person for the job. Having a sound recruitment strategy and a positive work environment means that staff are happier in their jobs, which reduces staff turnover and ensures that the people working for you are experienced, motivated and competent. Secondly, staff training can be crucial in reducing inefficiency. Making sure that your staff have the necessary skills to complete their job will improve their efficiency. Finally, the technology being used is integral to your business. Even the most highly skilled workers will be hampered by unreliable or out of date technology. It is a sound investment to maintain working, modern equipment and technology.

4. Mitigate defects

Both internal and external defects are bound to leave a customer unhappy.  Whether it is an internal defect which is identified during the manufacturing process, therefore delaying supply; or an external defect discovered by the customer, both result in a dissatisfied customer and damage to the reputation of your business.

5. Reduce transportation costs

Transportation can be an expensive aspect of any business if not properly managed.  This overhead can be reduced by spending some time co-ordinating deliveries to ensure they are only made in bulk and using minimal sub-contracting which can be an unnecessary expense.

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Our response to limit the spread of COVID-19

  • As COVID-19 continues to spread, we would like to take a moment to let you know what Financial Spectrum is doing to respond.

    While we haven’t been directly affected with any confirmed cases, we are taking all reasonable precautions to remain safe.Our priorities are:

    1. Keep our staff and clients safe
    2. Stay fully operational in our service delivery and continuing to manage your financial affairs
    3. Play our part in minimising the impact on our community against the spread of COVID-19

    Financial Spectrum has the technology, infrastructure and systems to continue business as usual remotely and our staff will now be working from home.

  • You should notice no change to our service, with the exception that we are encouraging our clients to meet via video call, rather than face to face, unless requested. We will be contacting all clients with meetings booked over the next two weeks with instructions for a video call.This is an evolving situation and we will continue to monitor developments. We will keep you informed of any material changes to our approach.

    These are unprecedented times and we understand that many of you will be feeling unsettled about your finances. We would like to assure you that we are open for business and are here to help you. If you don’t have a meeting booked but would like one, or if you have questions, please contact us at info@financialspectrum.com.au or on
    02 8238 0888

Brenton Tong

Managing Director

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