Have your ROI and profitability been plummeting throughout the previous fiscal year? Do all your business’s financial analyses show a sharp downward curve?
COVID-19 was incredibly hard on all business owners. It not only created unforeseen public health challenges but also hit both national and international markets like a freight train, causing account deficits and income losses.
And the changing political landscape and other sweeping changes only made the market more volatile. But now, as we look into 2021, we can see that the landscape is changing. Businesses are picking back up, growing their products and services, and aiming high for growth once again.
So, what can you do to remain competitive? How can you gain back the steam you lost in 2021?
Let’s find out!
There are many reasons why your business may have gotten off track in 2021, such as COVID, decreasing market investment, low employee efficiency, and customer churn, but you can change that by utilizing the simple strategies outlined below.
1. Research the Competition
If you’re focusing all your efforts on customer service and still losing money, try to find out why it’s happening. To do that, you research your competition.
Researching your competition will allow you to identify why your customers are spending less on your products, what you’re doing wrong, where you can focus your efforts, how you can increase productivity and profitability, and help you focus on your audience.
The research you conduct will also make it possible for you to determine where you can make improvements to attract customers. For example, if you discover that other companies are offering customer loyalty programs that come with bonus and bundle offers, then you will know what you have to do to get your customers back.
2. Conduct a Financial Analysis and Reduce Waste Expenditures
Knowing exactly how much money you earn and how much money is being spent each month is crucial to your business. Being unaware of these important matters is simply making your job harder, and this increases the possibility of unwanted surprises.
So, analyze your company’s financial statements and look at the expenses. Is there anything that you can cut out? Were you aware that your company could’ve gotten tax reprieves on all the charity work it did in the fiscal year?
Conducting a financial analysis can help you find out where your business is lacking, correct those problems, and reduce waste expenditures. In fact, as a business, you can safely cut around 5% of all waste expenditures without reducing your product or service quality.
Some areas to look for when reducing monthly costs:
1. Premises – Is everything in your company being utilized? Are there any areas where improvements can make the workflow more efficient?
2. Production – Can you cut waste or perhaps reuse the waste product? Are there any processes where streamlining the production process can improve workflow?
3. Utilize Time-Tracking Software
Figuring out how many hours an employee worked at the end of a payroll period is a nightmare. And according to WorkPuls, More than 75 percent of employers find that they have to correct 80 percent of the timesheets they receive.
Businesses not only lose money by not keeping track of their employee work hours but also experience decreased productivity in operations. After all, if you have to spend six hours every month setting your payroll to rights, then you’ve got an efficiency problem.
So, to increase business productivity and profitability, consider using time-tracking software like QuickBooks Time, Tick, and Time Doctor—and see your business improve!
4. Create a Budget
Did you buy or lease some expensive equipment without considering your income and are now in debt? Or make a business decision that left you unable to pay your employees?
A budget can save you from making these mistakes.
Not only will developing a budget for every department allow you to waste expenses by a wide margin but also help you analyze your actual spending against your projected costs, which will allow you to focus more on decreasing the costs of operations over time.
5. Automate Your Payroll
In the fiscal years of 2019, the IRS levied penalties on payroll tax violations totaling around $13.7 billion. And in the next year, this figure rose to $14 billion, so tax errors don’t seem to be going around soon.
So, if your business is plagued with payroll errors due to incorrect data submission by employees or inefficient management of tax dates, all of which lead to a decrease in ROI, profitability, and an increase in customer churn, then you have to switch to an automatic payroll system.
An automatic payroll system like Gusto, QuickBooks, and Namely will not only allow you to pay taxes on time but also make accurate calculations, generate pay stubs, and mitigate errors without having to put in intensive effort.
6. Find Project Management Tools to Improve Productivity
We know that as a business owner you want to chase your dreams. You want to make your impact on the market, and you want to make sure your customer gets what they were promised.
But inefficacies in the project management system can hold you back. If a project that had to be done in two days was done in four and still didn’t meet your goals, then you know you have a problem.
Such inefficient project management practices not only decrease business productivity and reduce customer satisfaction but also increase customer churn, which is not good for business success.
So, by using project management software like Asana, Zoho Projects, and Trello, you can both improve employee productivity but also increase customer satisfaction.
The Bottom Line
Bringing a business back on target seems like the hardest job in the world—after all, you can never get your customers back after you lose them, right?
Not only can you get your customers back but also increase customer retention by making the right changes in your business. But the key is to discard what’s not working and actually try something new.
So, if you want to remain competitive in the market, reduce operational costs, increase turnover and productivity, and induce business growth, then try the steps we’ve mentioned above and see what happens!