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3 Easy Ways to Maximize Your Bottom Line

The manner in which we maximize our bottom line may differ by the nature of the industry; however, there are some methods that just about every business type can benefit from, including increasing value, reducing expenses, and winning customers.

Increase the Marginal Return
Although a price increase may be the first solution that comes to mind for increasing the contribution margin of a product or service, it does not solve the question of getting the consumer to willing pay more. The focus instead must be on increasing the quality or perceived value of our product/service. A manner that ensures the requisite value increase or increased quality perception is to streamline internal processes. Finding internal economies of scope and scale can significantly decrease your costs while increasing the quality of your products and services.

Strategies such as six sigma and ISO auditing make identification of areas of improvement to increase process/procedural quality a regular part of the organization's daily thought process. If you are a small company without resources to invest extensively in either program, there are consultants that can help you to apply similar principals with reduced monetary investment. Any manner in which a stringent continuous improvement program is implemented to identify inefficiencies, to streamline processes, and to implement ongoing programs that ensure maximization of the core competency, increased brand quality can be achieved.

Reduce Expenses
Expense reduction often signals the dreaded management requirement that may or may not lead to bonuses and may or may not lead to future layoffs. The challenge for any business is to maintain expenses reasonable before it is necessary to reduce staffing – the least likable manner of cost reduction.

In recognition that high expenses can mean a reduced work force employers can usually gain buy-in from employees on proactive cost reduction measures:

  • reducing electricity usage
  • reducing office supply usage
  • reducing short-term bonuses

As the C-Suite embarks on it’s duties and responsibilities there are certain goals that should remain consistent: to maximize potential benefits and rewards, and to minimize potential threats and loss. If this is not an apparent goal, something is very wrong. M-Words Every C-Suite is Required to Love

Some longer-term initiatives include:

  • reduce energy & water consumption
  • negotiate lower prices with suppliers
  • address inefficiencies in the delivery and supply chain
  • ask employees to identify areas for improvement in their areas of responsibility
  • reduce ancillary services

You may notice that some overlap with the section above as value increase and expense reduction is not mutually exclusive. Also, although I focused on internal processes in the preceding section quality programs require both an internal and external focus.

Increase Sales Volume
This is another of those facets that can be accomplished from varied approaches. Relationship building with current customers is a preferred method that is likely to increase sales as well as provide great low-cost valuable insight. Get feedback from your customers; find out how many of your products they utilize; could they could use more, in number or type, of your products or services? Also, find out why they like or dislike your product/service. Is there a manner that you can convince them to try one of your products they do not current utilize on a regular basis? There maybe potential to expand and grow these relationships; however, you will never know unless you ask.

Armed with the feedback from your invested and patient current customers, branching out to seek new customers is easier. As an informed organization you can choose the right mix of products/services to market. Loyalty programs and trial sizes garner goodwill that may lead to future sales while communicating broadly, including the use of social media, maximizes your reach.

Although these methods are not the easiest to implement and the desired results are not necessarily immediate, they are easy ways to maximize your bottom line as they do not require extensive research, new market entry, or new product development. These are methods that any organization can implement and benefit from while enhancing the customer experience.

What other ways can you think of to maximize your bottom line?