Top 5 – Easy Ways to Improve your Top and Bottom Line
For any organisation one of the key strategies to success is to manage the top and bottom line well. While many organisations have a finance team who can guide the way, for true success the responsibility lies with each department manager or team leader.
This can seem a daunting prospect for non-financial managers as their core strengths usually lie outside the world of finance and accounting.
Below are the 5 top easy ways to improve your business’s top and bottom line that non-financial managers can act on back in the work place.
1. Plan to Increase Sales
Good news! Your sales team does not need to work harder rather they need to work smarter to increase sales. There is an old adage, ‘Sales people who do not have a plan are planning to fail’ which will have a serious knock on effect on the team’s performance and your performance, therefore, take the time to help your team members create an action plan that will ensure they focus on the right tasks to increase sales. Your role is to help them stay on track while executing their plan.
2. Generate Revenue from Innovation
No matter how successful a business is there is a natural lifecycle for products and services that is hard to escape. Once a market becomes saturated with your product and that of your competitors, sales revenue slows. To reverse the trend businesses will explore a number of strategies. One of these is to successfully change course by using innovation to generate revenue. One simple yet effective way is to use your existing team to manage existing sales channels and to invest in a volunteer niche sales group who focus on knocking down the barriers that can slow down innovation and growth in a business.
3. Sell to Your Existing Customers
It is much easier to sell products and services to existing customers than to someone you don’t have a relationship with. If you have focused on taking care of your customers in the past, and your products have performed well for them, they are more willing to give new products a try. Because the relationship is in place, far less (expensive) selling is required.
4. Reduce Variable Expenses
Variable expenses are directly related to sales. In fact, variable costs change with sales. As sales go up, so do variable costs. As sales go down, variable costs go down. Variable costs are costs of labor or materials that change with sales. One way for a company to save money is to reduce its variable costs. A simple way to do this is to renegotiate pricing with your suppliers to reduce the cost of raw materials.
5. Reduce Fixed Indirect Costs
Indirect costs are those which affect the entire business, not just one product. They are costs like marketing services, depreciation, general supplies for your business, legal services, etc. They are services, and costs, for your entire business, not just one product. Indirect costs are usually called overheads. Overheads are the ongoing costs of operating a business that can’t be associated with just one product or service. Focusing on identifying each one and reducing these will help improve the bottom line.
More information is available on top and bottom line growth under the topic ‘ Financial Measurement’ which includes models, templates, do’s and don’ts and more. Simply click here to subscribe.
- Model – Financial Stability Measures
- Model - Cash Flow Efficiency Measures
- Model – Cash Sufficiency Measures
- Model - Financial Measurement Defined
- Model – Profitability Measures
- Model – Financing Measures
- Model - Operating Measures
- Model – Liquidity Measures
- Template - Balance Sheet
- Template – Profit and Loss Statement
- Do's and Don'ts
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