Want to know 50 great ideas of profit building that you can put to immediate use in your business to increase profits and reduce costs ?
If yes, read all these ideas that have been implemented by customers and have benefited from their activities by giving them dramatic increase in profitability. Most of the ideas can be put into action immediately. Every idea has the potential to give many points% increase in net profits.
Research shows profits increase by 4% -56% and the costs of reducing by 18% -37% within 2 years using the simple 5 step process called Maps profit model. Usually a 5% reduction in costs is enough to turnaround most loss-making enterprises.
The companies can calculate the value of the savings from these two simple formulas
If the company made a loss
Total costs and expenses = Sales + absolute value of loss net + / - = income tax say X
minimum savings you will make in 2 years = 5% of X (which was calculated above)
If the company made a profit
Total costs and expenses = sales + net profit +/- income tax = say Y
minimum savings you will make in 2 years = 5% of Y (which was calculated above)
So how much you can save? Improve profits?
Revenue
This category has typically inflows of resources in the business generated through operations.
Needless to say that the profit building process can be used to generate ideas for marketing and sales. The following ideas have been generated with the aim of increasing revenue with little or no impact on the cost structure.
Revenue Increase Ideas
1. If your company has facilities located on a geographical area as you may be able to rent one antenna space to the cell phone companies. Typically these companies will pay for the use of roofs as a place to erect their antennas. Another option is for billboards, as if you have a central location with a high visibility building. This increases revenue, at no extra cost to you. The point here is to explore alternative uses for the facilities. Remember they are goods which can be used 24 hours a day, seven days a week. There are numerous opportunities available to increase revenue, if you look for them. Training room and function room services can be rented out in the evening or on weekends. How on earth or in excess of the reserve slots you owner of a public parking lot?
2. Determine if your business can market commission products and non-commissioned officers as an add-on sales. Look for opportunities to sell products based on existing customers at no additional cost. Examples include catalog sales to airline customers and sale of various products for customers by credit card. You can have the chance to do something similar. Your customers are more valuable than you think.
3. There is added value in your customer database? Perhaps your business could generate additional revenue from the sale of data. Alternatively, consider starting a telemarketing department to market another product line or services. Depending on the nature of your business and your customer base you can have something great here.
4. Explore the benefits of an effective e-strategy, including e-commerce, e-business, people e- and e-technology. No doubt the new opportunities available through the Internet offering new and innovative ways to increase profits and reduce costs. Consult an expert in this field including a cross section of your employees and magic will happen.
5. Segment customers into categories of user light and heavy users and determine the difference between these two groups. What must be done to generate another sale from both categories? All customers are key. What you can learn about the different types of customers to determine if more than one occasion that can sell? Making the most of these customers; who already have them.
6. Develop conservation strategies and growth strategies. In today's markets, it is important to keep your existing customer base to grow your business. It took a certain amount of resources to attract customers: you may want to explore ways to maintain a high percentage. What is the cost to acquire a customer? What is the cost to maintain a customer? Do your employees know?
7. continue to look for products and / or services increased that would add value without adding costs.
8. Explore opportunities to license or franchise your business products or services for additional market share or
penetration 9. Explore merger and acquisition scenarios where efficiency could be obtained for all the undertakings concerned.
10. develop a relationship with a long-distance carrier in which your company will distribute phone cards for the customer base in exchange for a fee or a residual commission.
salaries
This category has typically associated costs
· Pay Management
· Pay no management
· hourly wage
· Employment Training
· Overtime pay
· All other pay, salary and wages items
savings Ideas costs
11. Establish a 45 to 60 hour a week working environment among the leaders . cost structures among your competitors are substantially similar to your cost structure in order to obtain an advantage because managers are working more hours. This assumes that managers are productive. Managers who are responsible for a workforce of hourly employees are usually at the plant, a store, restaurant or office, at least this time. Sometimes turnover is extremely low in early or closing hours. During the hours lenses managers can save considerably by programming fewer employees and fills same. In addition to labor savings, managers will be more knowledgeable about the operations and find ways to improve customer service, training and operations. I put this process in place in different places. At the beginning there will always be resistance, but once that managers get beyond the initial hump things will run smoothly. I also find that some incentive programs work well here. Obtain the incentives of the manager on the basis of dollar jobs saved and come to understand the process.
12. effectively manage your salary administration programs. Many companies pay lip service to this principle, but they are not able to obtain true levels of success in the administration and management of salary. To start, make sure you have a range of salary for each position in the company. Wages must be structured so that the midpoint is 100, the minimum is 80% and the maximum is 0%. The basic philosophy is that the candidate should be taken to a position between the minimum and the midpoint on the basis of his experience level. Employees are then moved to the upper range on the basis of performance. This philosophy is based on the premise that midpoint is the position amount the company is worth. Employees can get an additional 20% through the stellar performance. Few employees should be paid in the range of 0%. Each job is worth a specific amount for the organization. If a new hire needs training to become efficient in a particular job, the employee is working at a level below the position value and, therefore, should be paid at the minimum salary range. When the employee's performance is a completion of training and can perform 100% of the job functions the employee move quickly toward the midpoint of the salary range.
13. Insist that a salary survey to be done every year to make sure you have reached the desired position of the Community with respect to your competition. In this case the competition is those companies that would recruit employees. You must make sure that if an investigation lasting 10 competitors; you have a 75% higher income bracket of these companies for your key positions and more than 50% of these companies for the lower-level positions. The implementation of this strategy will help reduce turnover and will also ensure that you are not overpaying for positions.
14. Ensure that the salary administration program allows you to adjust salary revision. Typically, this is done once a year for the employed, and every six months for hourly employees. The review should include a performance evaluation form and the employee performance levels must be established wage increases. In other words, determine the pay for their own performance evaluation system.
15. Establish a bell curve of wage increases. We say that about 8% of the employees are top performers, 12% are above average, 60% are average, 12% are fair, and 8% is poor. Create a salary increase guideline that reflects this curve, with the best-performing employees who receive the highest increases. For example, the higher employees are given the 6% to 7%, above average employees by 4% to 5%, employees on average 3%, the fair employees 2%, and poor employees 0%. This allows the organization to monitor and reward performance while continuing to meet its increased budget salary. Obviously, your goal is to continue to train and develop the workforce. Occasionally, low-performing employees should be replaced with ones better suited to the position. The bell curve is just a process to ensure that star performers are recognized and rewarded for their work.
16. establish the budget help pay rise and stick to it. Plan salary increases for next year, using the bell curve of which the above idea. Department managers should budget for salary increases for employees assuming that next year's performance will be at the same level this year. Please be aware that some of the performance ratings will change. There will always be exceptions. This process will help ensure that your organization will be within the new salary increase budget.
17. The budget guide salary increase should be preapproved. When a different voting occurred during the year, treat it as an exception and do so to justify it, because the performance may change-may rise or fall. A strict salary administration program will ensure that budgets are met.
18. Establish a training rate for all appropriate positions. This is critical when the organization experiences higher levels of turnover in the first and second months of work. The formation rate is lower than the standard rate of pay and is applicable only during the period of training. The employees are given an increase once the training was completed satisfactorily. Determine whether the rate of formation could be established for other positions in the organization.
19. When the rate of formation is not appropriate, to establish a test rate for the 0-day standard. This rate is lower than the standard rate of pay and is applicable only during the first 0 days of work. If performance is satisfactory, the employee will receive an increase in the standard rate. Determine whether it was possible to establish a testing rate for all positions in the organization.
20. Develop a work management system in which a computer provides daily or hourly volume and amount of work required on the basis of seasonality. Most companies have a tendency cycle that can be measured in 15-minute increments. First, you need to find a way to overcome the idea that your company can not be traced in this way. There's a reason for your business. Discover your business model is the first step in determining how to manage labor costs. Management will give you many reasons why the company can not be monitored. Once you work through all their concerns, you and your team can identify the trend elements, aspects of your customers' behavior which, in fact, can be monitored and plan accordingly work.
21. determine if the new hires would qualify for the tax credit program targeted work whereby a percentage of training dollars is reimbursed by the government.
22. Determine whether your organization could benefit from tax concessions for the supply of childcare employees.
23. If your employees handle cash transactions, install the cash reconciliation software driven process to save time and to change shift at closing. This will also reduce the lack of cash. This type of process also saves time in the process to withdraw.
24. Constantly seek changes to the software that can reduce the work. Seconds saved could also mean dollars earned. Using technology is a natural approach for the entire effort of improving productivity. If your company has recently explored this area, effective tools that currently exist may surprise you.
25. Having an industrial engineer to evaluate your business in terms of time and motion studies to determine if the additional efficiencies can be achieved in areas where a high throughput is important. This approach can still work today. Some managers run their business the same way they did 10 or 20 years ago. Time and motion studies can have an impact on cost reduction, productivity, customer service, and employee morale.
26. Establish a self team with specific responsibility to improve productivity and reduce costs in a particular department or area of the organization.
27. Develop an incentive to reduce absenteeism. That aid should be tied to productivity improvement and availability of workforce objectives. It should be based on the reduction in absenteeism from the previous period. The incentives could be a holiday bonus based on a 1% reduction in absenteeism
28. Develop a variable pay program for which the management salaries are reduced by 5% to 10% of across the board, and these dollars are set aside in a bonus pool. When there is the achievement of objectives, managers have the opportunity to earn even higher levels of compensation. However, these dollars will be at risk if managers are not meeting profit targets. The chance to earn even higher levels of compensation will help to sell this item.
29. Check your staff turnover is another way to reduce operating costs. Implementation of strategies for the entire cycle of human resources to ensure that all systems, procedures, policies and practices are tight to prevent employees from falling through the cracks. I refer to this as the human resources closed ring. If you think about it, you'll see that there is a cycle to the process of human resources. It starts with recruiting, interviewing, selection and placement and continues to orientation, training, salary administration, performance evaluation, development, promotion, and finally termination. Then the cycle begins again. Make sure that all the areas mentioned are friendly dependent and are designed to retain employees. Identify areas where improvements would reduce the number of employees who leave.
30. In order to determine where to place additional controls, to measure the costs of labor in terms of cost per unit, the cost per test, the cost to check guests, etc. breaking your labor costs to lower unit defect will help you better identify cost-cutting ideas. It will also be easier to influence and control.
other personnel costs
This category would typically contain associated costs
· Applied Payroll Burden
· Superannuation Employers Part
· holiday
· Paid Holidays
· sick leave
· Bonus
· short / long term disability
· Medical Group
cost savings ideas
31. make that the company has a program that offers all full-time employees the opportunity to receive a higher salary instead of accepting certain benefits (such as medical, dental and life-insurance). Today many employees are in progress on the project of a spouse. Why not let these employees choose a higher salary instead of benefits? As long as the salary increases less than the cost of benefits, the company will save money and employees will increase their income.
32. evaluate the cost of his pension administration. There are competitive programs that can reduce administrative costs. A simple evaluation of three different companies will determine if you have the opportunity to realize savings. Even if you do not want to change the current pension administration you may still be able to negotiate better terms, showing your assessment.
33. Reduce workers' compensation insurance, aggressively reducing accidents. Evaluate your actual compensation of workers to determine your history of complaints. Most companies set a real speed and never re-evaluate them even if their experiences change. Depending on your business you may be surprised at the potential savings here.
34. Use of the Internet surveys conducted benefits to meet the costs with those of similar organizations.
35. Challenges third-party suppliers to reduce administration costs by using the Model Maps profit and passing these savings along to you.
36. continue to monitor the workers' compensation costs and develop action plans to reduce them.
37. Develop a back to work program that puts the injured employees in alternative positions. There are times when the injured employees want to stay active in the organization and appropriate locations.
38. negotiate agreements when situations of long-term workers compensation dictate.
39. eliminate alcohol to all company-sponsored activities. This approach can prevent accidents, reduce the cost of drinks at functions and reduce risk.
Communications
This category has typically associated costs
· Long Distance Telephone
· Cell Phone
· Pager
· data lines [1945003con] · fax lines
Ideas for cost reduction
40. Authorizing a telecommunications consultant to analyze all communication costs in terms of fees charged, the equipment used and offered programs, the available promotions, the use, cell phone options, long-distance carrier performance and price, fax combinations and safety line, pass bills, and so on. Structure the contract so that the consultant invoices on the basis of percentage of costs saved or received refunds. In this way, there will be no cost to you, if the consultant is not able to improve your bottom line. Examine all areas of communication to find these pockets of spending that often go unnoticed. Pagers and cellular phones are usually sorted and distributed without the benefit of an organized plan. There are real and significant discounts if you shop around.
41. Continue to renegotiate rates and terms with vendors that provide services. Set an ongoing procedure for constantly renegotiated rates and terms.
42. monitor and control the cost of communications based on the cost per test unit (guests control, or who, like) in order to determine locations for exercise any additional control.
Utilities
This category usually associated costs are
· Gas and Electricity Usage
· Water
cost savings ideas
43. Authorizing a utility consultant to analyze the utility costs. These consultants would know how to effectively deal with local public services in order to find out the benefits and opportunity costs associated with gas and electric services. They should be fully authorized to check existing equipment and records. They should be experts in the development of an index and analysis and creating demand graphs to identify situations in which it may have been excessive. They would also represent your issues to the committee of public utility.
44. Pay your consultant based on a percentage of the savings associated with its action points. The typical rate is 25% to 30% of the savings and repayments shown in the course of a given period of time. There should not be any cost if the savings have not been shown.
45. Action phases of energy savings take, including setting thermostats to 72 ° F. automatic controls should be put in place to control the temperature during the hours.
46. turn off lights in conference rooms, restrooms and officers, when not in use.
47. turn off all lights not related to safety at the close of business.
professional fees
This category typically includes associated professional services costs such as
· Legal and human resources related expenditure
· Proposals (national and international)
· fees for technical services
· professional services
cost saving ideas
48. Speaking of taxes. If your lawyer does not bring in taxes speech, you should. Do not be shy. In the business world, lawyers are free to set their own fees. The best time to discuss it at the beginning of a new legal issue.
49. try to settle cases rather than fight.
50. He advocates to design standard modules that can be used in routine operations.
Conclusions
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