It takes a combination of skill and long-term planning to run a consistently profitable business. You have to have a good understanding of what your customers want, how to keep costs in line and how to adapt to any changes that may take place. What are some other habits that profitable businesses stick to that lead to their success?
They Separate Emotion From Business
While you want to make sure that your employees are happy, you don’t want to keep anyone around just because you like them or because you have a personal relationship with them. Even if the employee who shows up late or is rude to your customers is your mother or best friend, you need to either reassign or fire that person. Ultimately, workers who are late cost your company productivity while those who are rude to customers will drive them away. Both of those things cost your company money that may be hard to recoup.
Profitable Businesses Let Customers Pay In Multiple Ways
Small companies may be worried that credit card fees may eat away at their profit margin. However, not allowing customers to pay with a credit card could drive away sales or discourage a customer from coming back if he or she has other options. Even if you do lose a little bit of money on the transaction, multiple payment options are a convenience to your customer and an example of good service. Catering to the needs of your customers will always create more revenue in the long run.
Profitable Companies Pay Their Employees Fairly
A good company will pay an employee what he or she is worth as opposed to paying as little as possible. While you may pay a teenager with no work experience minimum wage, you want compensate your managers and other important employees well enough that they can live comfortably. Doing so will increase morale, which could lead to better service and less turnover that costs more in the long run.
Profitable Companies Maintain Liquidity
Companies can’t take large orders if they don’t have the money to buy goods and pay workers to make the products or provide the services offered to customers. Therefore, a profitable company has a line of credit or a source of small business funding such as AFN that can provide the cash necessary to help a company expand. By having the resources to attract and help new customers, it is easier to keep money coming in and growing profits.
Profitable Companies Add to Their Product and Service Mix
While an individual may set out to start a roofing company, it may be more profitable to eventually expand into remodeling kitchens or basements. A burger shop may start off with burgers and fries on the menu, but it may be more profitable to add milkshakes or specialty items that can be made cheaply and sold at a high margin to happy customers. By evolving and expanding, companies can keep the competition at bay and retain their customer base.
Profitable companies understand that they need the right people and right products to keep their customers happy both now and in the long-term. By offering the people what they are willing to pay for and keeping costs low, a business of any size can turn a profit and stay profitable for as long as it wants.