Tired of having a good sales month only to find expenses come in higher than expected and then ending up with a mediocre profit or even worse a loss. Are you seeing a trend of increasing expenses or declining sales? You need to implement a profit improvement plan. You really only have 2 major choices, increase sales or decrease expenses.

Here is a checklist of steps you can take.

Profit Improvement Plan

Increase Revenue

  • Increase marketing activity and advertising
  • Enter new markets, expand in existing
  • Increase selling prices
  • Increase marketing on high margin products
  • Reduce marketing on low margin products
  • Lower the discounts allowed
  • Verify all deliveries are being invoiced
  • Check invoicing accuracy
  • Increase Internet sales
  • Optimize website to increase conversions.
  • Increase traffic to website with SEO or paid advertising
  • Develop referral partnership with complementary businesses
  • Find new sources for leads
  • Set-up lead nurturing system
  • Increase size of sales staff
  • Optimize or streamline selling process
  • Set sales goals by sales person
  • Daily sales huddle
  • Track sales leads in a CRM
  • Increase close rate
  • Add monthly service plan
  • Add a down-sell strategy
  • Carefully watch your competition

Decrease Overhead Costs

  • Find a smaller facility
  • Sublet unused space
  • Sell obsolete plant and equipment
  • Liquidate obsolete, damaged or slow moving inventory
  • Manage inventory levels to minimum necessary
  • Reduce amount of work that is in-process
  • Reduce size of staff
  • Implement preventive maintenance
  • Set goals and responsibilities for staff
  • Employ contact labor
  • Eliminate unnecessary projects
  • Insist on multiple quotes
  • Bargain with suppliers
  • Pay off highest cost financing
  • Manage receivables closely
  • Prepare budgets
  • Monthly Review of financials against budget
  • Go paperless
  • Find cheap long distance phone service
  • Use Skype for International calls
  • Outsource IT services
  • Negotiate costs of employee benefits
  • Implement water and power conservation programs
  • Improve worker safety programs

Decrease Variable Costs

  • Weed out low profitability products
  • Increased training
  • Improve morale
  • Streamline processes
  • Reduce cycle time
  • Reduce scrap rates
  • Reduce rework
  • Reducing, reusing and recycling waste.
  • Improve quality at point work is done
  • Boost productivity
  • Manage overtime expense
  • Automate where possible
  • Upgrade to newer technologies
  • Measure operational efficiency daily / weekly
  • Negotiate lower material costs
  • Challenge price increases