Updated: Jun 23, 2022
It's difficult for smaller companies to compete with the management capacity of large chain stores or franchise operations. However, small companies can act more quickly than big companies. So, if you know what to monitor and where to get information, your business can be as successful as any.
Consider the following ideas for saving time and money and making your business more profitable.
1. To sell right, you have to buy right. If you're going to offer your customers prices that are competitive, you must first buy competitively. Attend wholesale auctions, buy factory direct where possible, and establish a buying co-op with other small but noncompeting businesses.
2. Treat your customers right and they'll keep coming back. Customer service pays off in higher profits. Your entire staff should be aware that it is the customer who provides the money to meet payroll and pay for future salary increases.
3. Learn from other people in small businesses. Develop a circle of friends in similar businesses around the country. Discuss ideas and business problems with them on a regular basis. You'll find out what others are doing to manage problems with inventory, receivables, personnel, fixed assets, computers, etc.
4. Try new ideas. Be innovative and unconventional when necessary. The fact that something isn't currently being done in your industry or in your area shouldn't keep you from trying something different if it will give you a better product or better service for your customers.
5. Ask your employees. Companies that ask employees for suggestions get good results. Your employees are directly involved with both your customers and your product and are in a good position to suggest improvements.
6. Make costs everyone's concern. Motivate your employees to be concerned about net profit. They should be as concerned with controlling costs as with generating sales. To encourage participation, consider implementing a bonus program based on a percentage of costs saved.