How Can I Improve My Company’s Bottom Line?

It is understandable that a key priority and focus for business owners is what they can do to increase sales and increase profits. Having a healthy bottom line puts the business in a great position as it means that reserves build up to have as emergency funds or this money can be used to invest into the future growth of the company. One of the questions we often get asked is “How can I improve my company’s bottom line”. This article will explore some of the most popular and effective methods of doing this.

Look at your pricing

One of the first things you can do to directly impact your bottom line is review your prices and adjust accordingly. This exercise does take a lot of thought as it is not simply about charging less for your products in order to get more sales. Whilst this pricing strategy can indeed work, it is not a given. You may not be able to afford to reduce the price any more than you already are due to the cost of sales. This could also be a risky strategy because if you are trying to be the cheapest, there is always someone who can d it cheaper. Could you bulk buy stock for overall savings?

You could be in a position where you are actually not charging enough for your products or services. It is important that you do not sell yourself short. If your prices are too low, potential customers may think your product is not of a high quality which will have a huge impact on your reputation and brand perception. Compare with competitors to see what the price of their products are. This should help steer you in the right direction.

Reduce Expenses

This might be easier said than done, however, there may be some areas of the business where you can reduce expenses and more. This can be anything from your office space, to packaging, advertising, insurance, stationery and more. Measure what value you are getting from thee purchases and see if they are vital to the business. If it is not vital you have it then ensure that it is a providing a return on investment. If it isn’t then this is a huge indicator that it can probably go completely or be substituted for a cheaper alternative.

Focus on who you are marketing to

Whilst marketing is an expense, it should be used effectively through a range of channels and targeting the right demographic for your business. Ensure all your marketing efforts are targeted to the ideal customers rather than shouting a generic marketing message to the world. Conduct significant research before undertaking marketing and maybe seek the help of professional marketing agencies who have experience in your industry. They could help you save money in the long term, provide you with invaluable advice and steer your marketing in the right direction.

Make the most of good credit

Businesses that are established and have established good credit over time should use this to their advantage. Some business credit cards and loans may be available at a lower rate than you initially got them for because you are no longer a new business and therefore deemed less of a financial risk. Talk to your bank and other financial institutions about what options are available when it comes to refinancing as this could free up some capital.

Work with your accountants for advice

Always seek advice from your accountant. They are not just there to crunch the numbers for you. Choose an accountant who will be invested in the success of your business and who can provide you will financial advice to help you reach your business goals. They are a wealth of knowledge so make sure you use them.

As this article suggests, there are several ways a business can improve their bottom line. Some of the methods discussed are relatively quick wins, whilst some are more time and money-intensive. However, by creating a strategy, you can improve your company’s bottom line in the long term rather than just a short-term solution.