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Add You - Profits and Business Success - 5 Profit Traps to Watch Out For
Imagine your surprise when a prospective employer asks you to come in and interview for not one, not two, but FIVE hours of interviewing. Five hours... can they really do that? Yes, and some companies who want to be particularly selective will have you in for as long as TEN hours in a single day. Interviews which last for several hours are typically conducted by Fortune 5
old or no technology - processes take longer and are prone to errors
up to date communications - email, web enquiries, voice mail, email you can check wile away from your office
the right management information - are you collecting and useful data
Cash Flow
Cash is king. More businesses fail due to cash flow problems than anything else. These systems must be failsafe and monitored on an ongoing basis:<
Accounting is one of the most vital processes in any business. To say the least, it is even more important than manufacturing goods and selling them. Flow of revenues and expenditures ultimately decides the fate of a business as does its proper management. The requirements of every business may vary, but the general requirements of a business like collection, classification and analy
And on top of needless expenses, businesses can also lose potential profits through poor management processes and techniques. So let's have a look at 5 of the main culprits which contribute to lost profits and reduced success:
Overheads
Limit your overheads to 10% of your sales. If your overheads are significantly more than 10%, some options may include:
reducing office size
removing unnecessary travel - try phone or video conferencing
stop trying to impress with an expensive fitout
overstaffed - look at employee numbers and positions
consider what you spend on office supplies - these are often 'nice to haves'.
High inventory levels - insufficient purchasing controls
Advertising costs - what are you spending and what return are you getting?
Employee and Management Issues
Happy employees work more effectively and productively. If your employees are unhappy then their performance is impacting on the potential profits of the business. What to look out for:
staff performance - keeping unproductive employees
nepotism - hiring family and paying them too much
unskilled employees - training not provided, no opportunities
poor morale - salaries, working conditions, benefits
Processes and Systems
Failure to update processes with technology can leave you out in the cold with your customers and suppliers. Older technology becomes obsolete and is no longer supported by the supplier. Do you have:
old or no technology - processes take longer and are prone to errors
up to date communications - email, web enquiries, voice mail, email you can check wile away from your office
the right management information - are you collecting and useful data
Cash Flow
Cash is king. More businesses fail due to cash flow problems than anything else. These systems must be failsafe and monitored on an ongoing basis: How to Structure a Good Bonus Plan
Bonuses Plans Should Be UniversalTo get your entire staff pulling in the same direction devise your bonus plan to include all employees at some level and after a pre-employment evaluation period (often 90 days) with the company. Many plans include part timers as well as full timers but at a somewhat lesser share of the proceeds.Bonuses Must Be Significant and of Perceiv
Overheads
Limit your overheads to 10% of your sales. If your overheads are significantly more than 10%, some options may include:
reducing office size
removing unnecessary travel - try phone or video conferencing
stop trying to impress with an expensive fitout
overstaffed - look at employee numbers and positions
consider what you spend on office supplies - these are often 'nice to haves'.
High inventory levels - insufficient purchasing controls
Advertising costs - what are you spending and what return are you getting?
Employee and Management Issues
Happy employees work more effectively and productively. If your employees are unhappy then their performance is impacting on the potential profits of the business. What to look out for:
staff performance - keeping unproductive employees
nepotism - hiring family and paying them too much
unskilled employees - training not provided, no opportunities
poor morale - salaries, working conditions, benefits
Processes and Systems
Failure to update processes with technology can leave you out in the cold with your customers and suppliers. Older technology becomes obsolete and is no longer supported by the supplier. Do you have:
old or no technology - processes take longer and are prone to errors
up to date communications - email, web enquiries, voice mail, email you can check wile away from your office
the right management information - are you collecting and useful data
Cash Flow
Cash is king. More businesses fail due to cash flow problems than anything else. These systems must be failsafe and monitored on an ongoing basis:<
It is a common belief that management and leadership are the same role. While it is common that a manager also plays the part of the leader, these two roles are truly separate in function and in the way they add to the success of an orginization. By understanding the difference between management and leadership you will become more effective in helping others see the road ahead.<
High inventory levels - insufficient purchasing controls
Advertising costs - what are you spending and what return are you getting?
Employee and Management Issues
Happy employees work more effectively and productively. If your employees are unhappy then their performance is impacting on the potential profits of the business. What to look out for:
staff performance - keeping unproductive employees
nepotism - hiring family and paying them too much
unskilled employees - training not provided, no opportunities
poor morale - salaries, working conditions, benefits
Processes and Systems
Failure to update processes with technology can leave you out in the cold with your customers and suppliers. Older technology becomes obsolete and is no longer supported by the supplier. Do you have:
old or no technology - processes take longer and are prone to errors
up to date communications - email, web enquiries, voice mail, email you can check wile away from your office
the right management information - are you collecting and useful data
Cash Flow
Cash is king. More businesses fail due to cash flow problems than anything else. These systems must be failsafe and monitored on an ongoing basis:<
If your team can’t get meet the established objectives, your days as a leader are numbered. It would be great if your employees came to work each day, happy, ready to work, and performing at their highest level, but this usually isn’t the case. Your job, as a leader, is to get a group of diverse professionals to work together to achieve a common goal – regardless of the obstacles y
nepotism - hiring family and paying them too much
unskilled employees - training not provided, no opportunities
poor morale - salaries, working conditions, benefits
Processes and Systems
Failure to update processes with technology can leave you out in the cold with your customers and suppliers. Older technology becomes obsolete and is no longer supported by the supplier. Do you have:
old or no technology - processes take longer and are prone to errors
up to date communications - email, web enquiries, voice mail, email you can check wile away from your office
the right management information - are you collecting and useful data
Cash Flow
Cash is king. More businesses fail due to cash flow problems than anything else. These systems must be failsafe and monitored on an ongoing basis:<
American employers have generally been required to carry Workers Compensation Insurance, or provide a suitable alternative coverage for their employees, since the early 1900s. The early benefit employers received from participating in Workers Compensation plans -- a reduction in litigation -- is no longer self-evident. In fact, new causes for litigation addressing job-related illne
old or no technology - processes take longer and are prone to errors
up to date communications - email, web enquiries, voice mail, email you can check wile away from your office
the right management information - are you collecting and useful data
Cash Flow
Cash is king. More businesses fail due to cash flow problems than anything else. These systems must be failsafe and monitored on an ongoing basis:
acounts receivable - collections must be on time
payment terms - don't create a situation where you provide the service now and customers pay later
credit losses - from poor credit approval processes
pricing - not charging enough for what you do/sell
Not enough Planning
Lack of an articulated plan can lead to poor (and costly) decisions:
long and short term goals not articulated - business lacks direction
employees not engaged - not involved, don't contribute, no ideas
decisions are ad-hoc, and not taken with the bigegr picture in mind
How does your business fare against some of these profit drainers? Are you spending money needlessly, or on items that aren't adding value to your business? There is always room for improvement when it comes to profit: spend carefully, save easily, invest wisely.
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