How to Keep your Business Lean and Profitable

If you want to make sure that your business is as lean and as profitable as possible then you are not alone. So many other companies are in the same position as you, but there are many things that you can do to try and help yourself to grow, without hemorrhaging money.

Observe

One of the first things you need to do is try and observe. You need to become aware of your industry and you also need to understand your needs. Learn how to optimize and take note of any errors you may be making along the way. You also need to learn how to use the data that you are collecting daily. If you can do this then you will find it easier to use the data that you have and you may even find that you can improve your cost structure as a result. If you don’t take note of where your business stands right now and if you don’t try and document the things that influence your expenses then this will work against you. You may also find it very difficult to track things and this can result in you not doing as well as you could in the long run. 

Say No

You also have to learn how to say no. This can be difficult when you run a business but it is so important. If you have a growing company then it is very easy for you to say yes to a new product or even a new service if you have a client who doesn’t quite fit in with what you provide. Although this can be a new pipeline for you, you have to remember that saying no to everything isn’t what you should be doing. If you want to help yourself here then you need to stay focused and you also need to make sure that you are getting the results you need from your core customers at all times. If you can keep your focus narrow then this will help you to scale and it will also lead to bigger and better results later down the line.

Variable Staffing

Another good way for you to keep your business lean would be for you to staff your company well. You need to make sure that your staff can cover the core services you offer and you also need to make sure that you use contractors to fill in the gaps. Too often, start-ups find that they take funding early than they should and they scale too fast by hiring too many staff members. If you can, you have to make sure that you use a smart and a variable staffing model so you can make sure that you cover all of your services properly and that you also find that you can get the result you want overall.

Automate Savings

If you can, you need to set up automated savings for your company. If you don’t then you may find that you end up struggling to save for investments or taxes. Saving automatically is one of the best ways for you to protect your company moving forward and if you can teach yourself how to live off the remainder of what you have then you won’t have to think about much at all. Little things like this can help you to get the result you want and it can also help you to keep your company lean at all times.

Consider the ROI

You also need to consider the ROI of what you are working with and the expenses that you are paying. Things like this will determine the return you get from everything. This should ideally include your return too. Sometimes the best thing you can do is focus on the things that you are good at. At the end of the day, you are a CEO, and in a business of one person, you can easily make it work.If you consider the ROI of everything you do and then put the things that are going to get you the highest ROI first then this will go a long way for you and it will also give you the chance to put the focus on the right things moving forward.

Tech Support

Invest in tech support and also learn how to leverage the tech investments that you have. If you run a small business then you may find that you have to leverage tech for things like invoicing, accounting and even document storage. You may be an expert at what you do, but you can’t be an expert at everything. If you learn to accept this and if you rely on help from external sources when you need it then this will go a long way when it comes to safeguarding your company overall. You also need to make sure that you are making the most out of your tech and your apps too. If you can do this then you will soon find that it becomes easier for you to make the right choices.

Don’t Be Tempted 

You have to also make sure that you avoid temptation when it comes to rebranding. Although you may be tempted to as your company grows so you can stop showcasing yourself as a start-up, this can work against you. If you want to work around this then one thing you can do is try and save your money and instead, refresh your website. By doing this, you can then add your own content, and focus more on value. There aren’t many businesses out there that truly need to rebrand, so avoid the temptation of a flashy new website and instead focus on what matters to you in terms of the bigger picture.

Align Resources

You also have to make sure that you are taking steps to align your resources so you can make sure that they coincide with your company objectives. You also need to know the goals that you have for your company. If your goal is to try and grow as much as possible then this is great, but you need to make sure that you are not overwhelming your business. If your goal is to manage cash so you can stay lean, then you may want to focus on the short term and make sure that you are always investing in things like sales. If you can do this then you will soon find that it becomes easier for you to get the result you want out of your company.

Hire Slow

If you can, you need to keep as much focus as possible on your first team. You need to hire slowly and let go of people quickly. Although this isn’t nice, you have to remember that it is your first phase that will set you up for success later down the line. Take the time to make sure that you are always doing what you can to perfect your team and let go of people who are not as committed as you are. Relying on external contractors will help you out a lot too. If you can hire freelancers over hiring in-house then this will allow you to grow even when you are trying to keep the cost down. Look into things like a formula for free cash flow too, as this is a good way for you to move forward with your company without compromising your long-term goals.

Develop your Team

Surround yourself with a diverse set of team members and also make sure that you look into peer-to-peer organizations. You need people who you can compare practices with and you also need to make sure that you are taking steps to try and create a trusted set of advice that you can rely on. If you can do this then it will save you from running into a number of issues later down the line. Remember, you can outsource here, so if you can’t hire an advisor in-house then you can take measures to hire one on a freelance basis instead. 

Growing a business isn’t easy, especially if you are trying to stay lean while doing it. You need to ensure that your approach is always optimistic, yet cautious at the same time. You also need to find ways to turn those fixed costs into ones that are more variable. It’s far too easy to fall into the trap of hiring far too many people at once and you may even find that you end up inflating your inventory too without realizing. This can all lead to you spending more than you should be on things and it will also stop you from being lean. Problems like this however can all be avoided if you simply take the time to invest in the company you have while being constantly mindful of your expenses. If you can do this while leveraging things like free marketing and outsourcing then you will find it easier for you to keep your company on a positive trajectory moving forward, which will help you more than you realize.