Simple stuff that works!
Sometimes it's difficult to see the wood for the trees when business life is fraught with trouble. When life is like this, why not go back to basics?
I’ll be controversial – I contend that there are only 4 ways to grow a business, or for the really bleak situation, to reduce the rate of making losses!
Business school rocket science is important for those who understand it, but today we’re taking a very simple approach.
So, what are the magic “4 ways”?
- Find more customers (but, very importantly, of the right type)
- Do business with your customers more frequently
- Increase the value of the average sale
- Increase the efficiency of what you do in the business
At this point you might want to argue with me – in fact I’m happy to offer a prize of a bottle of champagne to the first person who can think of a 5th way, something which doesn’t fall into one, or more, of the magic 4.
As this is the first in a series of articles I’m not going to go into more detail about all of the 4 ways now, let’s start with the one with least potential.
Why does increasing efficiency have limited potential? Because in the absence of the other 3 ways, increasing efficiency pretty soon runs out of steam, and business growth comes to a halt. For this reason I find it the least exciting, so let’s deal with it first.
Under the banner of increasing efficiency comes the most common method business owners adopt to increase profits, especially in these recessionary times – cutting costs. This is a very quick fix, and unlike the other 3 ways, you can calculate the “saving” accurately.
Lots of my clients have slashed their spending on areas such as marketing, advertising, training, entertaining, equipment purchase (saving borrowing costs) etc.
The “saving” is of course net of the sales income lost, and this is where uncertainty creeps in.
Whilst cutting costs is common, increasing efficiency in other ways is also potentially important. If it is possible to use new technology, or smarter ways of doing what you do, then profits can be increased without obtaining additional sales.
As important as increasing the efficiency of what you do in the business is, there is a limit to what it can achieve, and then what do you do to improve performance?
Consider how to implement one of the other 3 ways of course!
We’ll do that next time, and until then, remember the champagne challenge.
Alan Suggett is Business Services partner at unw and can be contacted by phone (0191 243 6009) or e-mail (alansuggett@unw.co.uk)
Other 2009 news
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New arrivals hit the mark
2009 has seen the arrival of several new members to the team with specific individuals arriving to add to our sphere of expertise across all sectors of the firm.
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15% VAT rate extended for New Year's Eve traders
Pubs, clubs, restaurants and other retail businesses remaining open past midnight on New Year's Eve will be allowed to continue charging VAT at 15% on their sales until they close or until 6am on 1 January 2010, whichever is the earlier, the Financia
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2009 Charity update
unw Charity Group continues to flourish and met on 4 occasions during 2009.
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More Simple stuff that works! (Episode 3 of the Four Ways to grow a Business)
I issued a Champagne challenge for someone to prove me wrong by finding a 5th way and still have had no takers! We previously dealt with numbers 1 and 4, so now we’ll have a look at number 2.
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More simple stuff that works! (Episode 2 of the Four Ways to grow a Business)
In my last article, I proposed that there are only 4 ways to grow a business:
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Senior Appointment at unw
unw is delighted to announce the appointment of Michael Morris as partner in the firm’s Audit and Assurance Department. This will further strengthen the expertise within the team as unw’s client base continues to grow. Recent client wins at unw in
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Simple stuff that works!
How can my business grow, or even survive, in these troubled times?
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Alan Suggett Appointment
Alan joins unw on 1 April 2009 from Baker Tilly Newcastle where he was the partner in charge of the Accounting Services department. Before that he co-lead a management buyout of most of the former Binder Hamlyn office from Andersens to form the indep
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Mark Hetherington: New VAT partner at unw
unw chartered accountants have recently enhanced the service offering to their clients with the arrival of Mark Hetherington as a specialist VAT partner
