About this episode
This list is from INC.Com. Written by David Finkel a professional business coach. Here is a quick list of the simple things you can do to increase your company's gross and operating profit margins. Speed up your design cycle (Decision Making). This can allow you to accomplish more tasks in half the time, potentially increasing your profits over 30 percent. The faster you can make a decision the more efficient your team can become. Eliminate tasks and activities that don't add value to the company or customer. Every dollar you save by eliminating the cost of things that don't add value to your company drops directly to your bottom line. Increase pricing. If you bill hourly, review your billing rates and push them higher. If you charge per product, look for ways you can command a higher price. Could you bundle more value into a package? Improve your marketing and sales scripting to effectively sell at a higher price? Or could you just boldly increase your pricing? Most farms/businesses set their prices when their business was first launched, and since they were so hungry for business, they set pricing levels low. Over time, the business likely only made nominal increases to pricing every few years, but rarely did the owner ever sit down and fundamentally rethink his or her pricing model. Well take a close look at your pricing now. Regularly review your administrative and operational staff levels closely. Let your revenues grow faster than you’re hiring. If you have underutilized staff create methods of task that can add to your bottom line. Shorten your sales cycle. How can you close your sale faster? This will decrease your sales cost per transaction and free up a lot of hidden cash flow that previously was locked up in your sales staff. – biggest ones are early season discounts, interest expenses, and product condition. Increase the dollar value of every sales transaction. Ask, How can I get each customer transaction to be for a larger dollar amount?" What upsells, cross sells, or resales could you strategically implement? What package offers could you test and introduce? Do the trucking yourself Manage quality (in the meat, grains, etc) Deliver to final destination Deliver on their schedule Beware the steep cost of attrition/retention. Customer retention is a strategic expense if spent wisely. How can you increase your customer retention? Landlords Private Meat Sales Grain Merchandisers Employees Feed your winning sales people more leads (even if that means you starve your lower performing sales people of leads.) This is not a time to be "fair", but to be strategic. If every lead you give to John is worth $2,100 and every lead you give to Sarah is worth $3,200, then you've got to take this into account when you divide leads. Be transparent about this and let it be a spark to help John learn how to increase his own dollar value per company lead given to him. Think of this with employees. If one employee is better at a task, give them the option for overtime and send the others home. More worth your money. 9. Strategically map out systems. Look for ways to educate your staff on the ideal use of their time with your product or service. 10. Shift a cost from a fixed to a variable expense to give yourself greater flexibility. This is a way to protect your cash flow. It is extremely important for unproven tactics and strategies. Flex leases, variable rate loans (inverted now), basis contracts. 11. Shift a cost from a variable to a fixed where the value is proven. Make this shift only when you can negotiate a substantial price savings by doing so. Fertilizer, seed, insurance, interest rates (now) 12. Consistently look for ways to lower your fixed overhead. Scrutinize your base expenses to eliminate non-strategic expenses that just don't add value to the company or to the customer. 13. Negotiate hard. Take the time to plan out your negotiation strategically. Create competition for your dollars. Create a list of concessions you want, with extras for you to trade off. Research the market to better understand the best deal you can expect. Even hire an experienced negotiator to help you make the purchase on the best price and terms you can. If the asset you're buying for your business is large enough, the ROI on your negotiation work can be immense. 14. Get clear on all the costs of inventory: cost of capital; storage; insurance; etc. This will help you make informed stocking levels. – placing insurance premium equivalents into a reserve account can add up over the years and create a pool of income generating self-insurance. 15. Set optimal inventory levels and stick to them. Constantly be on the lookout for ways to safely reduce your inventory levels. If you have inventory you're unlikely to sell, scrap or donate it so that you can free up the space and write off the inventory. Want Farm4Profit Merch? Custom order your favorite items today! https://farmfocused.com/farm-4profit/ Don’t forget to like the podcast on all platforms and leave a review where ever you listen! Website: www.Farm4Profit.com Shareable episode link: https://intro-to-farm4profit.simplecast.com Email address: Farm4profitllc@gmail.com Call/Text: 515.207.9640 Subscribe to YouTube: https://www.youtube.com/channel/UCSR8c1BrCjNDDI_Acku5Xqw Follow us on TikTok: https://www.tiktok.com/@farm4profitllc Connect with us on Facebook: https://www.facebook.com/Farm4ProfitLLC/ Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.