Navigating the Delicate World of Non-Arms Length Transactions.
What Is Right For You?
Keys to Securing The Funding You Need to Scale.
Keys To Increasing Revenue And Profitability At Your Business
Leading Tax Advice
Call Nicholas Kilpatrick
Over the course of time businesses have essentially the same probability of success. One of the key determining factors as to whether or not a particular business venture will achieve “success” (depending on how you define it) is how and to what extent the business owner will establish, develop, and implement a strategy to increase productivity year-over-year.
Impossible you say? Invariably, that emitted response is the function of a lack of clarity in the strategic function of the business.
All business owners are busy providing customer service, tending to administrative details, and the like, yet some – strictly from a financial perspective – are more profitable than others.
Here we list some keys to increasing business profitability; you will find that these keys are in some cases intuitive and easy. However, the true work is in the consistent, disciplined execution day after day – the “seeds that give root to the blossom”.
From a profitability standpoint (other components of thriving business management are dealt with in subsequent articles), herein lie our keys to increased productivity and profitability, based on our research and experience on the industry.
A charted path
Many businesses are created each year, and all (those who aspire to own their own businesses), without a directional rudder for their business careers. Freshman business owners and veterans – as well as their staff – require navigational rudders that answer the question “How will we increase revenue and profitability”.
This is not an article on the fine strokes of business operations, but rather one to prioritize the strategic and marketing direction of the business. Thought must be given to the type of products/services provided, and the criteria used to make decisions on what you the owner want the business to be.
Decide how your business is going to grow and pursue that path for a pre-determined period of time, such as one year, from September to June (July and August are summer holiday months, so difficult to provide analytical value from those months).
Too many businesses approach strategy and innovation without a game plan that positions it for success. Instead, they take traditional strategies and try to execute them better. To capitalize in today’s economic market, you need to know where to penetrate.
A standard business strategy involves getting as many customers as possible, but the variables requiring consideration, and which will determine the ultimate level of success of your business, include among other things the desire to satisfy customer needs and wants and economic considerations.
Relentlessly pursue your target customer
An oft quoted strategy is “They bought just so they could get rid of me”. We don’t propose that you make yourself a pest, because today’s successful businesspeople will generate that success by bringing value, and not by being the loudest mouthpiece.
Determining a strategy to get in front of your target and exposing the value your business can provide is the kernel of the sales path leading to increased productivity.
Premium Accounting and Tax Assistance - call Nicholas Kilpatrick at 604-327-9234 to find out more for your business and click here to see our latest first-time offers.
Ask yourself “where is my target customer looking so that can I put our name and value proposition in front of them?”. If it’s in the universities, then advertise there. If via mass mailouts or in targeted magazines, then penetrate there. Once there, and once potential customers recognize your existence and request more information, offer value via free product samples, updates on the office, a kind card at special times, etc…. Anything that provides value – you know what those things are; no one needs to tell you what would be valuable in your mind and compel you to switch, right?
Develop a pipeline
Once the strategy and target are established, we then move to a need to get the desired customers. As they purchase from you, you can consider other higher margin services to the extent that they create value to the customer.
Note that the overriding intent here is not to just push al your products/services on a client who doesn’t want it, but rather to provide value to the client. This is called feeding the pipeline – we start with a large opening in the pipe The higher up the pipe you go, the higher margin services you provide. As we move along this path of services, the pipe becomes thinner (less pool of clients requiring these services), and the profit margin increases.
It’s easy to see that, the larger the pool of clients that enter the pipe, the larger the potential for higher margin services
Existing at all levels of interaction with the client is the understanding that you as the owner get incredible, valuable face time with the client. It’s at this time that you create trust, which adds to referrals and additional, high margin services. A customer-centered owner with a good bed-side manner will thrive at maintaining a healthy customer pipeline
Process business rather than an owner-business
As your business grows, the need to move from an owner-driven business to a process driven business becomes more and more necessary to facilitate continued growth. As the number of customers served by the business increases and administration takes more time and effort, these people need to be shown their value by being treated within the business properly.
Processes are only as good as the extent to which they add value. The main pursuit of implementing processes is to increase quality while at the same time increase efficiency. Customers will recognize this value and the quality that comes with it, and will naturally provide referrals, because everyone, if recommending anything or anyone to their trusted network, will not refer unless and until they are sure that their own credibility will not be compromised as a result of it.
As businesses begin, there are no processes, only a desire to provide customer service and get paid for it to pay the bills. If your marketing and strategy are done right, clients come and, over time, outgrow your facilities, equipment, and staffing levels.
To avoid customer service deficiencies, you, the owner needs to keep the business components larger than their capacity. In other words, try your best to keep the staff, facilities, and equipment such that you always have capacity and never get that “over busy” feeling”. Working at excess capacity has a unique result of disenfranchising good employees and , at worst, frustrating clients (and potential referrals) to the point that they jump to a competitior.
The best and most successful way to mitigate this potential problem is to convert to a processed based business.
Employing systems, technology and automated procedures, converting to a process-based business can eradicate inefficiencies at all levels of the business, automate redundant or repetitive tasks, and allow staff to do more of that which they are talented to do, thereby increasing the personal utility of their respective work and keeping them interested.
These 4 keys are the pillars that establish a strong program to increase the productivity of your business. In our next blog, we’ll look at keys to increasing profitability once that revenue increase has been realized.
Nicholas Kilpatrick is a partner at the accounting firm of Burgess Kilpatrick in Vancouver, B.C. He specializes in business development, and has worked with business owners to increase profitability at all stages of the business. He can be reached at email@example.com or at 604-327-9234.
 Anthony, Scott D., Mapping Your Innovation Strategy, Harvard Business Review, May 2006, p2
 Franz, Peter and Kirchmer, Mathias, Value-Driven Business Process Management: The Value-Switch for Lasting Competitive Advantage, 2012, McGraw-Hill,