Double Your Profits in 100 Days!
Every manager, and particularly owner operators, are interested in increasing the profit of the business units they manage. Profit Savvy has distilled a wide range of advice and methods to enable you to do this and has grouped them in a Menu of the recommended sequence of events so that you can realistically hope to double your profits from your existing business within 100 days.
There is no science to how you can improve your profits or turn around a lagging or troubled business but the group of techniques that have been collected in this Menu will give you some insight into opportunities to dramatically improve your profit.
This article will focus on optimizing your current business operation. It is not aiming to necessarily increase your revenue but to streamline what you have and thereby direct more money to bottom-line profit. Because that is simpler than increasing revenue, it can happen much faster. Its a good idea anyway because it would be wasteful to first focus on revenue increase if the business was not as efficient as possible already. That would mean missing out on maximizing the profit from the increased revenue.
Doubling your profit sounds like a very formidable task but even something as simple as increasing your prices by 1% can easily lead to an average of 11% increase in profit according to a study of 1,200 businesses. Similarly, careful application of the 80/20 Principle and the Theory of Constraints can have quite dramatic impacts on profit.
We have arranged the items in this Menu in the order that we feel flows the best. You can of course change the order in which you apply these tasks to suit your circumstances but quite often a method of improvement is ideally preceded by some earlier step. We encourage you to think about following this process before consciously deciding not to.
This article is about quick ways to improve the profit of your existing business. In another article (Double your Revenue in a Year article) we discuss how you can continue to grow your profit by growing your sales revenue using your soon-to-be lean, profit maximizing, business model.
To use a medical analogy, Double Your Profit is the equivalent of triage. When a critical patient is first admitted to hospital, staff stabilize them and make the best of what they already have to work with. This is triage. Next, the staff work to get the patient onto a path back to full health and well-being. Double Your Revenue is our equivalent to getting your business as healthy as it can be.
No surprise, Double your Profit means just that. But when you combine it with our Double your Revenue article, your profit can grow 400%! But wait, there’s more. Many of your overhead expenses like office space, marketing and IT will not need to double to double your profit and revenue. For the sake of a demonstration, let’s assume your fixed costs remain the same. Your profit increase is no longer 400%; it becomes 600%!
Worth investing some time and effort to get these sorts of profit gains?
Double your Profit is a Profit Savvy Menu meaning it is a guide to what is on offer and refers to various Recipes and Tools throughout Profit Savvy when you need a refresher on a topic.
Set Your Goals
There can be no doubt that you will not be able to work very far into turning your profit around until you have decided what your goals are for the business.
A business can have many different types of goals including, for example
- Rapid growth.
- Improved profitability.
- An exit sale at a good price and so on.
Some of these may be incompatible with growing profit. For example, it is often hard to grow both revenue and profit because the income is used to pay for resources necessary for growth thereby leaving less profit.
In this article, we have assumed that your goal is to increase your profit.
Even so, you can spend a few minutes looking at your SMART goals so that they are clear in your mind (see Goals article).
You will have variations on the actual SMART goals that you set but essentially your target is to:
Double Your Profit in 100 days.
Get Yourself Ready
Your journey to increase profit will certainly stretch your abilities as a leader and a manager but will also require you to be comfortable with the various skills and disciplines that we are going to suggest in the rest of this document.
Before launching any of the following stages, you would be well advised to read the various Profit Savvy articles that we reference, even if they seem familiar to you, to refresh your thinking on this subject matter. In the Resources section, we provide some publications that we can recommend for further reading.
Right People on the Bus
Jim Collins, in his well-known "Good to Great" books, uses this term to refer to having appropriate people ready to work on your business. He argues that it is more important to have the right people before you start on a business or project overhaul than it is to try and get them as you are part way through the overhaul.
There should be no doubt in your mind that you are embarking on quite a difficult task.
Managers are often the sort of people that can put up with more uncertainty than more junior staff. This means that although you might be comfortable with the amount of change that you are about to introduce to your organisation, many of your staff may not be.
They will quickly divide into 3 groups:
- Those against you.
- Those largely indifferent.
- Those in favour of what you are trying to do.
Early on, you should take a mental stock take on the personnel that you have available to you and roughly categorise them into these three groups. If you have very few that are likely to support your efforts, you might want to consider whether this is something that you are ready to embark on or whether you should take time to change your staff until you get those who might support you.
We also write more on this topic in our Change Management article (NYA)
What to Keep and to Reject
We are going to apply the 80/20 rule quite heavily in this section of the discussion. If you are not familiar with it refresh your understanding by visiting our 80/20 Rule Menu article. There is more specific information in how to carry these analyses out in the 80/20 Business Analysis article and a bit more advanced methods using spreadsheets in the 80/20 Data Analysis article.
Products to Discard
Over time, the range of products that you have on offer will grow. Not all of these are good contributors to your profit and some of them may even detract from your profit by the time you take into account such things as inventory, warehousing, sales, personnel, price discounts, time commitment and similar.
We encourage you to perform an 80/20 analysis on your full product range, or at least on categories of those products, and to sort them by their contribution to your present profit.
All things being equal, the ones that are presently making the biggest contribution to your profit are likely to continue to do so. Exceptions to this might include such things as:
- When the market for a product is saturated and further growth seems unlikely.
- When you can’t get more of the product to sell.
- If the product is comparatively new, or otherwise disadvantaged, and you still think it has room to grow.
- If the products complement some other profitable product and so should be retained.
Keep in mind, that 80% of your products probably only contribute to 20% of your profit. Therefore, cutting substantially from this weaker end of the product range you have on offer means that you will be automatically freeing up resources, such as capital and people, that can either be re-deployed to focus on the highly profitable products or can be considered for a redundancy as we discuss in following sections.
There will undoubtedly be push back from staff on some of the products you want to cut. You might even find yourself resisting axing old favourites.
If you have properly shone some light on the actual profitability of the product, you can put the onus on staff to defend why something should not be cut.
Locations to Abandon
Over time, you may have built up a number of locations from which you operate.
Each of these locations is likely to have greater or lesser profitability. Sometimes this will depend on the same criteria as mentioned above for products; ones where the market is saturated and ones that still have potential because they are new.
However, you can perform an 80/20 analysis of the locations and decide which, if any, should be terminated.
When considering locations, also consider whether other (often virtual) outlets/channels such as a website, marketing through online portals and social media can provide sufficient ‘cover’ for the territory to not need a separately staffed physical office at the location.
Your existing locations can also be digital. Websites and social media specialists can be quite costly and it would be timely, at this stage, to consider whether these locations are returning on this investment and contributing to your net profit.
The fastest way to improve your profit is to reduce the costs in your business!
However, we need to bear in mind that this is a very limited step. If you save costs to the ultimate degree, you no longer have an operating business! Clearly there is some point below which cost cutting can damage the business rather than improve profitability.
Nevertheless, it is very often the first step undertaken by businesses and very often is undertaken without much discrimination. We often see overly simplistic cost reduction exercises where, for example, 10% of the staff are made redundant across the board without giving thought to necessary skill sets and the products and locations that we want to maintain.
Not all costs should be treated the same.
One group of costs could be categorised as Strategic Costs and are those that are incurred producing profit on the bottom line. In a sales organisation for example, these might be face to face sales people, but not their managers, and it might be advertising if it is working.
The second group are Non-Strategic Costs are all other costs that are necessary to run the business but will not bring in more business themselves. A whole range of administrative costs like:
- Managers of various sorts.
- Clerical staff.
- Real estate.
- Office supplies etc. can fall in this group.
Quite often a cost slashing exercise with these types of costs can be productive without damaging the business and these are therefore the ones that should be intensively focused upon.
One discipline applied to costs by high performing organisations is what is known as "Zero-based Budgeting".
Instead of just taking last year’s budget as a starting point and adding a little or taking a little away, the Zero-based Budgets are built from the ground up each year with the Managers of that Cost Centre having to demonstrate why those costs are necessary. Even if you cannot do this on an annual basis, doing it once off as part of this profit maximisation exercise will allow you to ask each Cost Centre Manager to justify their reason for a cost being there and, more importantly, to present data on why that is the case. There are a lot of web resources to help better understand this process if you Google it.
When cutting costs, you will get push-back from the Cost Centre Managers saying that the impact of these changes are unpredictable and maybe we should "go slow". If you follow that advice, you will never achieve the cost cuts that are possible. Much better to cut heavily and then restore anything that you have cut that proves to be a necessity. The only instance where you might think otherwise is in relation to making staff redundant. Not only is it unpleasant to let good people go, it is potentially difficult and uncertain to replace them with new hires later if necessary. In this instance, it is possible "the devil you know is better than the devil you don't".
One way to impose a cost saving discipline on your staff is to require that any expenditure of more than a certain amount (and make it a small amount) must be approved by you. In the short term, this makes a lot of work for you, but very quickly you get to work out the staff who are on board and present reasonable expenses to you. The staff in turn learn that it can be a painful experience taking requests for increased expenditure to a boss who is not going to sign and will probe deeply as to why this is coming to him.
Working with Suppliers
One of the easiest, and least painful, places to start a cost cutting exercise is with suppliers.
Any activity in this area can have good pay offs. For example, let’s assume that about half of your expenditure is on products purchased from suppliers. These could be Variable Costs if you manufacture or Cost of Goods Sold if you retail. If you can reduce the price you pay by 5%, you get 2.5% of that saving going immediately to your profits (50% of 5%) which gives you a new profit of 7.5%; a healthy 50% improvement over the current 5% profit.
We cover this topic more in our Reducing Variable Costs article.
Reduce Fixed Costs
Fixed Costs or Overhead Costs are those that will exist even if the business does not hypothetically produce anything. Alternatively, they can be thought of as costs that do not vary directly with production output. They include things like office and factory space, furniture & fittings and realistically speaking include all labour other than casual labour. After all, you can’t easily vary the size of your workforce.
We will look at labour separately shortly.
In the exercises above, you may have identified some locations that you can remove from your portfolio and now is the time to begin to wind that back.
It should be a simple exercise, if you have a decent set of accounts, to rank all your fixed costs by the size of their expenditure using the 80/20 principles. It makes every sense to then focus on your highest cost items with a view to attempting to reduce them.
For example, if you are in rather more palatial working spaces than you need, perhaps you can change to a less expensive space. Typically, this can mean moving from a CBD location to a suburban one with its lower overhead costs. With much improved levels of communication available to people these days, being centrally located is not necessarily as important as it might have been a decade or more ago.
Many overhead costs will be spread across the entire company: like power and telecommunications. You may not have ever grouped them together to see the sum of expenditure in these areas. If you do, an assessment of your various suppliers, and perhaps starting a tender with these company-wide costs, may lead to better prices and therefore savings that go straight to your profit bottom line.
Research & Development Costs (R&D)
R&D costs are an issue to address if you have any significant amount of money expended in this way.
Scientists may have difficulty explaining to you in "English" about why the project is important and why the costs are necessary. Push hard for a pragmatic analysis of what the research will produce, its probability of success and the likely income benefits.
Don’t let the scientists do this alone as they are likely oblivious to the market’s demand for their innovations. Involve marketing and other staff in a reality check of each project.
Scientists are often very pragmatic. Therefore once they are over their initial shock and horror, they may be quite positive or at worse neutral about the review project.
R&D can be loosely broken up into 5 categories:
- Pure or basic R&D, for example, nuclear fission.
- New product R&D, for example, a new hair shampoo.
- Improvement to existing products.
- Process R&D which will work on saving you manufacturing costs in your production line.
- Customer R&D where your scientists are working to better understand the customer and how to make more sales to them.
It doesn't take much to realise that most of your R&D effort will be most profit-productive in numbers 3 to 5 and somewhat in number 2. Number 1, pure R&D, is much less important unless you can see a very valuable patent coming out of it.
Reduce People Costs
Earlier on we wrote about the importance of having "the right people on the bus". By this point in this article, you have decided what products and what locations you want to retain and consequently will have identified products and locations that you no longer need. There will be personnel attached, either directly or indirectly, to producing and selling these products and to staffing the services that run out of soon-to-be redundant locations.
Staff are typically 50% - 70% of a businesses’ overhead costs. To reduce products or locations and not reduce staff is to miss out on a very considerable portion of the possible cost savings.
Savings are not only limited to very large companies. Take a small company, with (say) a 10% profit margin and staff representing 12% of the total company costs. A 25% (1/4) reduction in staff, gives around an extra 3% (12% * 25%) profit to the existing 10% or an improvement of 30% in profits.
Parkinson's Law (see Parkinson's Law article) tells us that "work will expand to fill the time available". This effectively means that there is almost certainly work being done by staff that doesn't add a great deal of value to the business. Reducing the number of staff effectively takes out some of this hidden surplus capacity and the remaining staff do not necessarily need to work harder; just smarter by selecting what work really does need to be done.
People experienced in rationalising staff numbers say that in most white-collar organisations up to 1 person in 4 can be made redundant without any reduction in worthwhile output. Sometimes this can be as high as 1 in 3 or 1 in 2.
The reason for this is:
- Much of the work is unnecessary (Parkinson's Law).
- Much of the necessary work is done inefficiently (see our Multi-tasking article).
- In almost any organisation the poorest performing 25% of people simply aren't very good at what they do and are not adding much value.
By pruning these people early, their salaries are saved. These are typically 60% of a services businesses costs. The remaining employees know the ones going are loafers and/or pests and so are heartened by the fact that they no longer carry these poor contributors.
Down-sizing staff is a very emotionally charged activity and requires a good understanding of the relevant legislation so that you do not find yourself in hot water.
If there are several people to be made redundant, you might want to consider hiring specialist talent to do this. They are likely to be:
- Better at it than you are because they do it for a living.
- Able to save the distraction of your other management resources in a one-off exercise.
- Able to reduce the psychic damage on the managers that you are retaining from having to let people go.
- Aware of the necessary legislation and follow that correctly.
For more on Redundancy Planning see our Redundancy Planning article.
Reduce Variable Costs
Variable costs are those that are directly tied to your level of production. If you produce more of an item, more inputs are required.
There are a number of ways to reduce your variable costs. We expand on this topic in our Reducing Variable Costs article.
Almost certainly areas of waste will have crept into your business over time.
Waste implies inefficiencies which in turn suggests a hit to your potential profitability from increased costs, lost income and unneccary expense.
Experts have caterorized waste into 8 types and there are many subtypes within each of these so you probably have plently of fertile areas to work in to reduce the amount of waste in your business.
Read up on the where and how of waste reduction in our 8 Types of Waste article.
Take a deep breath!
So far, we have been looking at how to save costs.
This is by far the fastest way to increase your profit but it has two major limitations:
- It can only be done once in a while and so can’t make a regular contribution to boosting your profit.
- How deeply you can cut costs is limited. You can’t cost cut your way to growth.
We are now turning our thoughts to the far more exciting opportunities to grow your business. These are open ended and you can continue to tune them, and your profits, indefinitely.
By the time you reach this point, you will have identified the product range that you are going to keep on board.
Even if your product is a service, it involves a work flow/production cycle.
In this section, we want to turn our thoughts to how we can rapidly improve the throughput of the product through your production cycle.
Identify the Constraints
The Theory of Constraints (TOC) tells us that there is likely to be only one, and certainly no more than a very few, bottlenecks/constraints in your system.
Wherever that bottleneck exists, it means that production cannot proceed through your production cycle any faster than the speed at which the bottleneck can handle it.
Therefore, it is important to firstly identify the bottleneck and then work very hard to reduce its impact on production.
We describe this in more detail in the TOC Menu article.
Any improvements that you can make to the efficiency of your constraint in your production system is likely to go immediately and totally to the bottom line since little or no further costs might be required to make that bottleneck work efficiently.
It is not possible to know what impact liberating your bottleneck/constraint will have but experts say 20% is often achievable.
As part of your TOC exercise, it will become clear to you that a number of parts of your production cycle have more capacity than is necessary to service the constraint.
In a poorly managed business, managers will nevertheless have these stations producing at their maximum capacity. The principle outcome of this will be that there is a large build-up of work in progress in front of the constraint and a stockpile of produced components of your product after the non-critical work stages (see Local Optima article for the profit hit this causes).
There may be an opportunity with some of your surplus capacity that you can take advantage of and which will go directly and immediately to your profit bottom line.
If you can find some other use of this surplus capacity, the output from those work stations can be sold outside the company and generate more income without reducing the ability of your bottleneck to continue to process components of your product.
We talk more about these opportunities in the Local Optima article.
Improve Cash Flow
There are a couple of quick, though sadly short-term, boosts to your cash flow that will help to give you working capital for use in tuning other parts of your business.
By the time we have arrived at this point in our make-over exercise, we have identified those products that we are going to keep and we have identified the bottleneck in our production cycle.
Because we have reduced our product range, we are likely to have an inventory of this now redundant product. This suggests that we should explore methods of selling out of this now redundant inventory as quickly and as profitably as possible to give us a once off cash injection, reduce the cost of inventory on the balance sheet which will increase the profit bottom line. Although this is a once off exercise, it may be very worthwhile and is certainly preferable to having now redundant inventory becoming less and less valuable as it deteriorates on shelves.
After identifying the bottlenecks in the production line and implementing the associated Drum-Buffer-Rope strategy (see Drum-Buffer-Rope article), it is very likely that we can also run down the stock pile of work in progress. While this work in progress is running down, we will be buying less resources to input into the production cycle. This will be a once off further saving that can go straight to the profit bottom line. Again, this is only a comparatively temporary measure but will kick your profit along.
Traditional accounting gives a somewhat false impression of profit in that it accounts for profit once an item is sold; rather than when the cash is received. Until the cash is received the profit has not truly been realised.
The TOC concept of Throughput (see Throughput Accounting article) takes this into account and argues that, realistically, profits shouldn't be counted until such times as the cash is received. If you can speed up the cash collection then your throughput of your production cycle has a corresponding increase.
This means that if your cash receivable process is in poor condition, the cash in hand that you might otherwise have will be delayed.
One way to improve your profitability picture is to improve your accounts receivable process.
Very often, this might be by way of offering a cash incentive for early payment, but this approach will have the effect of reducing profit; especially if the person would have paid eventually. Therefore, better ways of speeding up the Accounts Receivable, than offering a discount, should be explored before any other avenue.
Increase Sales Revenue
Another long lasting boost to your business can be a growth in sales. In this section, we outline how such sales revenue growth might be speedily achieved.
We are not looking here at a calculated improvement in revenue over time, this is covered in more detail in our Double your Revenue in a Year article.
Here we talk of rapid changes actions leading to quick returns.
Focus on Best Customers First
Earlier in this article, we identified the best products to provide and the best locations to operate from. We have left it to this point to spend some time on identifying the best customers for you to work with as it was first necessary to work out what products and what locations we would be servicing.
At this point in our profit maximisation process, we could apply the 80/20 principle to our remaining customers after any products and locations have been removed; and possibly taking some customers with them. Losing any customer is painful but might be necessary to boost profit. Some might be held on to with different sales channels, for example, replacing face-to-face sales with online sales.
At this step, we want to apply the 80/20 analysis to all our remaining existing customers and rank them in their order of profitability. Note that we said profitability rather than sales volume because if a customer buys a lot of product but gets a very substantial discount for doing so, they are less "profitable" to us than someone who buys less but pays more.
Once we have ranked the customers by sales profitability we work down the list until we notice a significant drop off in the profit from customers below that point in the list. This is typically the 80% of profit that comes from 20% of customers above this point and the 20% of profit from the 80% of customers below this cutoff point.
That is not to say that we shouldn't focus on the ones that follow but we certainly should be concentrating on the high profit ones and maximising the profit that we can make through them by seeing if we can increase our sales to them before we move on to a customer who is a comparatively small profit generator for us.
You can read more on this process in the 80/20 Sales Growth; Double Sales, Triple Profits article.
By this point, we now have an idea of what customers we want to sell which products.
The next step is to decide a pricing regime for these customers and for bringing on board other customers, including some of the ones that ranked low on the previous section on increasing sales volume. There is a separate article on pricing (see How 1% Price Increase can give 20% more Profit article).
A quick outtake from this is that an analysis of 1,200 businesses showed a 1% improvement in price would have averaged an 11% improvement in profit.
Improve Sales Funnel Flow
The term Sales Funnel refers to the flow of potential buyers though a sales & marketing program until they (hopefully) emerge as customers at the other end of the Funnel. (See Sales Funnel article).
But, because we are looking here for rapid improvement with the business you already have, the fastest way to improve sales is likely to be finding the TOC constraint in your Funnel and focusing your attention on that. See TOC and the Sales Funnel article for more information.
Over and Under Stocking
Over stocking products for sale and for input to your manufacturing cycle ties up money in inventory costs. Clearly, we should try to strip some of these out.
Perhaps even more insidious is the terrible profit damage that can be done when you run out of stock. These are often your best selling lines (which is why you run out) so not having them costs you sales.
Quick remedial actions outlined in our Over and Under Stocking article can plug this hole in your profit drain.
Adding It All Up
We can’t tell you how much extra profit you will make from following this Profit Savvy Menu because every businesses’ circumstances will be different.
But let us use a simple case study to demonstrate how all the steps above can add up.
Let us assume you have a business turning over $1,000,000 in sales and making a 5% profit before tax which is $50,000.
This means your costs are 95% of the sales or $950,000.
Let us say labour, which is typically 60-70% of costs, is $480,000.
Remaining fixed costs are $235,000 and variable costs are also $235,000.
Additional profit %
Product range reduction
5 loss making products out of 20 are dropped from the range saving $2,000 each.
1 warehouse dropped at $5,000 p.a. rent
5% quantity discount on 20% of inputs
1 store man dropped when warehouse closed $30,000
Say 10% improvement in production throughput. $100,000 in revenue @ 5% profit margin
Sale surplus capacity
Say 1% of turnover $10,000 less variable costs of $2,350
Inventory run down
Once off improvement of $60,000. Not counted as not repeatable
Say 10% improvement in sales revenue @ 5% profit historically. $100,000 @ 5%
Say 1% improvement in pricing on $1m in revenue
From this realistic example, profit went up by $75,000 which is a 150% improvement.
You could use this template to estimate your own profit increases from putting this plan into motion.
At the outset, we said that this profit doubling could happen in 100 days.
Just how long it takes depends on several things.
Scheduling the Profit Makeover
Firstly, and importantly, will be the speed at which you can address the several separate activities that are listed in this document. If you can address one every 10 days then it is quite feasible to get it done in 100 days.
Some activities are comparatively fast and others are slow. For example, if you have a lease on a building it might be some time before you can cancel the lease.
Some have a major impact and others not so much.
We can throw all the proposed activities onto a simple matrix like the one that follows:
Easy to Implement
Difficult to Implement
Throw each of the tasks and sub tasks you have in mind to do in one of the cells in this matrix.
From this table, it would be common sense to do the Major Impact/Easy to Implement activities first and then move increasingly through to the Minor Impact and the most Difficult to Implement. That way you are getting as much of the increase in profit as possible as fast as possible. Note that some things may have upstream or downstream implications that you will need to take into consideration when scheduling action on them.
Another determinant of how long this process takes is how disciplined you are with your time management. If you use a good time management system to free up your time for major projects, you will progress much faster than if you have a poor or non-existent time management system. For more on time management see our Time Management article.
Undoubtedly one of the major impacts on speed will be how many staff your business employs.
If you are small and really it is only you making management decisions, your speed will be the greatest.
If you have a lot of staff to both consult and to win over to the process, and the results which will impact on them, your progress will be slower. Staff may actively drag their heels which leads us to the next point.
Experts in this area say it is better to cut deep and fast and then patch up anything that comes unstuck rather than to have a prolonged period of continuous cuts that demoralise staff. They are kept worrying about whether their role, and maybe their job, are going to disappear.
The exception might be staff cuts so that you don’t remove a person then find you need them. Keep in mind that staff are often as much as 60-70% of the costs in a service business, not removing them will have a very significant impact on your profit gain.
As you work through the plan for optimising your existing business en route to increasing profits, you will be generating a large number of tasks as an outcome of the optimisation process.
These can rapidly become difficult to keep in your head and/or manage the process of executing them.
It is even more difficult if you have a number of people working on them at once.
There is quite a body of theory relating to how you process a large number of tasks in an optimal manner. Most of these are some form or another of a Kanban process and we encourage you to use a Kanban software planning tool to manage the process (see Kanban article). Trello is a free KanBan software tool that is very popular and easy to use.
If you have had some training on project management, you might be inclined to use a CPM (Critical Path Method) approach. Our research has indicated that an approach known as CCPM (Critical Chain Project Management) maybe a speedier way of reaching your goals because it takes better account of any resource bottlenecks that you have in your business (see CCPM article).
If there are several people in the team, you can ideally use a multi-platform cloud based tool so that everyone can connect, contribute and read on mobile and desktop devices.
Measuring what is important
Most likely you will want some way to measure progress against your 100 day timetable.
You don't want to get buried under an avalanche of statistics so you should choose your measurements (metrics) carefully to draw attention to the most important data.
Read more about this in our Metrics article
If you have any significant number of staff in your business, you are going to need to engage in a process of change management to get them on board.
Managers by their very nature have a higher tolerance for uncertainty and risk than staff who have not taken on the additional responsibilities in management. If you begin to make substantial changes to your business it is going to unsettle the staff and their natural tendency will be to dig in their heels and progress slowly.
Trying to drag them along "kicking and screaming" is not likely to be a very productive approach.
It is far better to spend the time educating them on the direction you are taking, and the reasons for it, and give them sufficient time to get that into their minds. This is where your vision statement for the process we spoke about above can be useful.
Almost certainly there will be natural leaders within your workforce. They may not be supervisors and managers in your workforce but they are the people that staff unofficially look to for direction.
You can best use these people by involving them in the process.
Firstly, they will very often have a very good understanding of the various elements of your business and, quite possibly, better than your understanding if your business is of any size.
Secondly, if anybody is going to resist your changes, it will be these informal leaders. Investing in them so that they understand where you are going, and can then explain it to their workforce peers, is very worthwhile.
As the manager in charge of this process, very little will happen until you, personally, make a start. This is something that needs to be led from the top and although some of the data collection and analysis might easily be done by a member of staff, you need to be seen to be the main mover behind this project if it is going to get any uptake from your staff.
Remember that we said, near the top of this article, that most of your staff will not be overly enthused by the exercise. You will need to be seen to be taking the project very seriously and monitoring its progress very closely.
To monitor, you will need to setup some sort of reporting mechanism whereby all the various tasks can be listed, assigned to one or more individuals along with a time and a relevant target like money saved, where possible. This then needs to be monitored by yourself and others on a regular basis. Fortunately, there are several simple software packages for both desk tops and mobiles that allow you to manage this sort of project with transparency so that everybody can contribute and see the results. A simple Google Sheets spreadsheet will also do the job well and can be shared around the business.
As we said at the start of this article, it is about quick ways to improve your profit. In another article, Double your Revenue in a Year, we discuss how you can continue to grow your profit by growing your sales revenue using your now lean, profit maximizing, business model.
The next step is yours!
We don’t know your business and its environment so we can only offer general advice on what might assist you to grow the profit for the business you presently have. You should always seek professional advice on specific matters only discussed in general terms here.
As discussed above, we cannot guarantee results in just 100 days as we do not know your particular circumstances.
There are several well-known books that can assist you on your path to doubling your profits. Ones that we are familiar with and recommend follow:
"Double Your Profits in 6 Months or Less", Bob Fifer, Harper 1994. Although this book was published quite a few years ago, its advice is timeless and it remains on a very popular list of books.
"The Successful Boss’s First 100 Days", Richard Koch, Financial Times, 1994.