It is a question that keeps many business owners CEO’s and managers up at night: “How do I increase company profits?”. These days, success is often mistakenly judged by profits. I say “mistakenly” because profits are a short term indicator that is often inaccurate. “Profit” is a simple mathematical equation of how much more capital do you have now then you did last time we checked. Profit doesn’t take into account investment in infrastructure, or staff. Quarterly reports don’t see the bigger picture.
I once knew of a company that had thought they had hit a ceiling on profit. The economy was down, their industry was stagnant. They were on track to match their previous years profit numbers, but the shareholders wanted growth. Feeling that growth was not possible, the only way they could figure to increase company profits was to reduce company expenditures. It made sense by the numbers: lower operating costs results in higher profits. What they failed to realize was that eliminating raises, laying off staff, and cutting hours destroyed morale. A staff with low morale accomplishes less, and profits go down. Their plan didn’t work out as planned, and they missed their profit projections.
Inspire Your Staff to Increase Company Profits
Your staff is the link between you and your clients. A happy staff sells more. A motivated staff is more productive. An inspired staff will increase company profits. Making business decisions based on math leaves out a majority of the information you need to make a good decision. Someone once told me that if you want to make a large fortune, you need to start with a small fortune. Well, if you want to increase company profits, you need to start by investing in your company.
Offer Incentives
So maybe you can’t offer your sales people a raise. Offer them an incentive instead. at 40 hours a week, one dollar an hour is equal to $2,080 over 52 weeks. So offer them that $2,000 bonus for a $5,000 increase in sales. Offer your technicians a bonus if they can lower expenditures in parts, repairs, or other items. If your staff feels a direct correlation between their well being and an increase in company profits, then they will work harder to perform better.
Offer Training
You may have heard the saying “Knowledge is Power”. Let’s take that one step further and say new knowledge is empowering. Training emboldens your staff. If they feel like their job is making them better, then they will become better. The boost in confidence from simple training will boost productivity, and lower costs. Both of those will increase company profits.
Team Building
When someone feels like they are a part of a team, they will work harder to make sure that they don’t let the team down. However, it takes more to make someone feel they are a part of a team then just calling the staff a team. You need team building exercises. Team building retreats do great things in this regard, or you can bring in someone for a team building event.
There are many ways to increase company profits. But to many times companies forget that one of the easiest ways is to invest in their staff. The return on that investment is usually much more then one would think.