Unlike large scale businesses, small businesses and start-ups are needed to alter practices and innovate new ways and means to improve their profits. Almost two thirds of businessesfail to increase profits throughout the first few years. However, it is these businesses that have the most potential for “change”, as there are less people and most of the time the owner is also the head of business or holds an important place in the staff.
The bottom lines
The concept of three bottom lines was introduced in 1994 by the well-known Business writer John Elkington. It explains how all three – social, ecologicaland financial – objectives must be met as the final outcome of a company rather than just monetary profits. This is wise advise to any company, but a small business, hoping to become a large scale player can definitely use it to improve themselves. According to the triple bottom line principle, a company must be environmentally responsible, economically sustainable and socially accountable.One may think it is too much for a small business to have people to do all that; hence you can use services of an outsourced CFO in Sydney to reduce staff costs yet have a more effective process within the company.
It is paramount that small business owners find new, innovative methods to have a good profit whilst keeping in mind the sustainability of the venture. This seem like a hard thing to do; however, steps such as first starting with cross-selling- for example,then perhaps advancing on to differentiation can be practices. Even though one doesn’t have to have an advanced degree or any formal education; however if you have one or know of “some theory stuff” you will see that it is not so hard to apply that to the business you are doing to gain a competitive advantage. As a start-up you can start with cost leadership where you offer the products with relatively low cost. Differentiation and focus strategies come later. Building good customer relationship is also important for a small business.
Core manufacturing and services
Although cost cutting and efficiency can be gained in all business functions, operations play a major role especially in manufacturing. Even in services, for example, hospitality, imagine how much money you can save if all the methods are streamlined to bring lowest costs and hence highest revenue. You can easily cut back in financial department by going for contracting out CFO services. HR is easy when you use automated procedures.Marketing and promotions can turn to more social media and web rather than press, mass media and outdoor. However you can’t stop manufacturing the cap to a bottle or cover of the book. Therefore looking for creative yet efficient ways you cut costs in the core operations is quite important. As future large corporations a small business today must know the smarter ways of doing business.