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Business Advice

5 Business Performance Fundamentals To Watch in 2023

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Running a business comes with a lot of responsibilities and challenges. There is always much to prioritise, including your business’s financial standing and performance.

It’s not uncommon for businesses to face difficulties and off seasons, especially in the current economic conditions. However, monitoring specific aspects of business and adjusting them accordingly generates a faster comeback and adaptability that will propel growth and longevity. 

Ensure your business has these performance fundamentals (if they don’t already) to give it the best chance to thrive in the new calendar year.

1. Consistent Profit Margin

Your profit margin is a critical element in optimising your business’s cost-effectiveness. This helps ensure you correctly price your products and services in the current market.

Unfortunately, most service providers don’t stay consistent with their margins. In very competitive markets, providers lower their quotes to get clients. While this means more projects, they might require more material and labour from the cash, leaving very little in your pocket. 

The key is to track your jobs and margins to ensure that you are constantly setting the correct prices for your services and earnings from the positions you complete. It’s also best to review the costs of labour and materials regularly to ensure that your margins are enough to cover the overall costs.

For more information on calculating your profit margin, see our previous blog.

2. Realistic client expectations

It’s important to assess before taking on any job; fully understand the job requirements and the client’s expectations before defining all the project deliverables to ensure you meet the client’s expectations. 

This is also important to ensure that you set accurate project costs and timelines. Setting realistic timelines benefits future or potential client start dates as well. 

Failing to deliver on what you promised because you underestimated the project’s scope can hurt your brand’s reputation and drive away clients. Understanding expectations can help target market needs and plant seeds for future business growth.

3. Financial performance

Monitoring your financial comings and goings is fundamental to ensuring your business runs smoothly.

Taking the time to analyse cash flow trends helps you identify problems and risks so you can address them well in advance. It’s also important to know the money that flows in and out of your business to guide you in making the right business decisions. 

Check out our blog for Improving Cash Flow In Uncertain Times.

4. Sustainable growth strategy

Growing your business is, of course, a good thing. However, growing too fast with inadequate resources and a lack of structured planning for sustainability places a lot of risk on your business.

Planning the growth strategy will allow you to see where extra support will be needed and what aspects can be self-sustained. This information will enable you to unlock growth opportunities, such as getting a loan and knowing what roles to hire for and which supply orders to increase.

5. Constant lead generation 

Marketing is indispensable for every business. If you fail to market your business, you lose the opportunity to connect with your target clients and introduce your services to them.

Social Media Marketing can be a free and easy way to start marketing your business. You can also use many specialised marketing channels to generate more leads for your business and convert them into actual jobs.

Review all your lead generation channels and assess the most effective way to convert leads into clients. You can ask your clients how they found your business. Then, you’ll know where to allocate more of your marketing resources.

The challenges for businesses to stay afloat can get overwhelming. Take control of your business by having a solid plan and keeping these performance fundamentals on top of your mind to ensure your business runs smoothly.

Is your business having difficulties? Talk to our expert advisors so we can guide you through boosting your business performance and get your business running like a well-oiled machine. Contact us today.

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