Whilst this graphic illustrates the 2015 three major small business challenges for business owners they are pretty much timeless and universal:
- How to increase turnover (revenue / sales)
- How to increase business profit
- Hiring the best people
I go through a number of solutions below…
Increasing sales revenue
Ideally business owner want more profit but as a larger profit is usually a function of sales revenue, then sales revenue needs to increase also.
There are two main ways to increase profit:
- To be more profitable (i.e. increasing your profit margin). The ceiling is your total sales revenue e.g. if your annual total sales revenue is $200,000, then if you operated a service based business with few expenses it’s possible to increase your profit to the ceiling of your total sales revenue equaling $200,000. Profit margins can be increased for all businesses.
- Increase your sales revenue (see heading above).
Hiring the best people
Unfortunately most small business owners don’t know HOW to recruit GOOD employees. It’s usually a hit and miss approach with business owners relying on resumes from applicants (being mostly embellished) and poor interviewing techniques.
To find GOOD employees requires a GOOD recruitment process and a firm understanding on the roles the new employee is to undertake.
For example, if you want to hire a receptionist who can do cold calls as well, this a very different person to hiring a receptionist that can do bookkeeping. Their personalities and skill set is completely different. For the former you need a “influencer” and for the later a “compliance-oriented” person. See the difference?