Tweet Right under your nose! When value is reduced your customers lose out. Not to worry, though. Here are two ways to increase profits that could be right under your nose:
Perceptive business owners may even recognize management problems that rob their companies of hard-earned profits. This gremlin is known as your soft costs: They reduce profitability and are hard to control. This reduces your ability to pinpoint and control the originating expense and thus, maximize your profits.
Years ago, a copier salesman installed an infrared counter in a copier room, allowing me to measure the number of times employees entered to create copies. Originally, we could measure the amount of copies made, but not the trips made from desk to copier room. Under your nose business plan simple device opened my eyes to a soft cost of wasted time by employees leaving their desks to copy forms they used numerous times each week.
Thus was my introduction into the world of soft costs and their control. Another means of soft cost control is uniformity. For instance, some contractors require all prospective technicans to own certain tools before they can be hired.
By requiring that technicians have certain tools and are proficient in their use, these contractors can ensure that service is performed at the highest level of productivity. For example, a certain leak detector may be required because of its high rate of detection.
This device enables the technician to complete the service call in the time allowed. Now, this program could at first be seen as costly.
However, Do-Re-Mi Contracting does a careful study and finds that true soft costs savings may be found by helping their employees lower stress. Stess management would reduce employee turnover due to burnout during peak seasons, reduce sick or missed days, and increase productivity due to better cognitive ability.
There would also be less job-related accidents and errors, and better employee morale, all adding up to savings.
Instead, the company believes if employees consistently show up for work and like their jobs, the business will be more successful.
In this case, Do-Re-Mi Contracting realizes that stress management training will cost money. However, in the long run, it has the potential to save them a larger amount of money in many areas of the company.
As a result, they implement the program with great success. Measure It Measuring soft costs is both an art and science. While it may sound like trying to catch the wind, soft costs can be determined through careful study.
Here are some ideas: Group project — If your company is considering implementing a major change of some kind, gather a group of people from your organization from different departments.
Sometimes, an outsider looking in provides us a much-needed objective view. Invite them to anticipate the costs of operation, and potential profits or loss from the change.
Pros and Cons — Draw a line down the center of a sheet of paper and list all the pros and cons of the change, no matter how trivial. Highlight sections with cost or profit potential so that you can closely examine these items.
Then, show this pro and con analysis to the group examining the change. Then, compare it to what the new procedure would involve. Would any steps be eliminated, saving time?
Would any steps have to be duplicated? Do the affected employees see a savings of either time or money for their department? Be Proactive An additional soft cost that many business owners and managers fail to account for is the cost of not implementing a business strategy in a timely manner.Companies too often look outside their organization to fill top jobs when the perfect hire could be right under your nose.
Whether we're in a recession or not, getting more sales and referrals is not optional if you own a business. Smart business owners use inexpensive tools like a customer database and automated email marketing service to keep in touch so no customer.
Under this part of your business plan, we have the have the most sensitive information about the business. They are the indicators by which most investors gauge the likelihood of success or failure of your company.
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