Have you thought about the lost opportunities in your business? Or linked some of those opportunities to the lack of procedures in your business?
Often because we are so busy or are comfortable, SMB people can miss opportunities to grow their profit margins. In Forbes this week, Bill Conerly wrote about two major factors leading to missed opportunities.
One factor is concentrating on revenue and forgetting margins. That is, worrying so much about getting sales and more money coming in that there is no assessment of actual profits (remember profits and turnover are very different terms, although related).
Bill gives the example of winning many jobs (so increasing revenue or income) at below-cost prices (so making no profit). My example is a freelancer who charges an hourly rate that doesn’t factor in costs such as running a website, electricity and administration – being the cheapest may win more work but doesn’t generate as much profit.
Further opportunities are missed through the lack of procedures.
“Written procedures can be an efficiency tool, which means better profit margins,” wrote Bill with a personal example of improving his own working methods.
Bill also quoted me with the following issues relating to a lack of procedures:
Have you seen any improved efficiency relating to having good procedures in place?
Establishing procedures in your business doesn’t have to be hard – just work on one at a time as you complete important tasks. My preparing procedures eBook is designed to help you through this process, or contact me with specific questions and challenges.