Continuous improvement for better profitability
Importance of reviewing productivity and market trends, and analysing your business performance, to maintain the profitability of your business.
Improving profitability isn't just a matter of focusing on it for a short time and then letting it look after itself. It's important to consistently focus on profitability across all areas of your business.
Regularly manage your profitability
You need to routinely review your profitability, assessing all the key areas including:
- purchasing
- sales and marketing strategy
- production and delivery processes
Build these reviews into your day-to-day business processes wherever possible. For example, encourage sales teams to focus on the profitability of sales, rather than just turnover. You could also reward production staff for suggesting more efficient ways of doing things.
Periodically, you will need to step back and re-examine the profitability of your business.
Watch market trends
Stay aware of trends in your market - they will have an impact on your profitability. Changes in the market can present new opportunities for business. You can capitalise on market trends and competitor intelligence by watching them carefully and adapting accordingly.
Use benchmarking and SWOT analysis to inform your profit strategy
Benchmarking shows you how you are performing against comparable businesses. If you routinely benchmark, you will get new perspectives on where you can make improvements.
Regularly carrying out SWOT, PESTLE and other models for strategic analysis will help you to manage your strengths, weaknesses, opportunities and threats as they change. This gives you the best chance to respond to changes before your competitors do, thereby protecting and growing your profit.