The majority of small businesses are started because their owners have a great idea or product they want to sell and prefer to be their own boss. Often they consider running their own business will enable them to have more control and a greater share of the profits. Unfortunately, the majority of these people do not possess many of the skills required to be a successful small business operator. Fortunately, business coaching for small business is now readily available on the Gold Coast. It’s designed especially to help small businesses achieve profitable growth.
Revenues do not necessarily mean profits
Having high sales figures or a large turnover doesn’t mean you are profitable, without properly managing your operating and production costs, you cannot tell if you’re profitable or not.
Having a business coach can help you see ways of improving your customer base to offset increases in operating costs and ways of improving sales
Knowing how to effectively measure your business success
Most small business owners are unable to properly identify which of their items are profitable and have little understanding of business principles. This means they are making their business decisions with limited information. A business coach will be able to fill in the gaps in their knowledge and give them a better business understanding.
Margins help to measure your profitability
Rather than work on dollar values, try estimating the true profit margin percentage of each of your products. Then try and price products to drive profitable growth.
Most small businesses offer a range of goods or services at different price levels. If you’re mainly selling lower priced items, then you need to more effectively price the higher-priced items relative to your market or work out a better way of promoting them.
Don’t allow a few highly profitable products to prop up unprofitable items. It’s a well know business strategy to sell some items at a lower price to attract customers, but this needs to be done effectively or all you’ll sell is the lower-priced items and so not make a profit.
In most businesses, there will be a mix of different products and services. Do you know which products are more profitable? Two or three products may be propping up one or more unprofitable products.
You always have to ensure you’re making a realistic return on all your investments.
Don’t rely on financial software to do everything
Many small businesses just rely on their software to do all their accounting and spit out the final overall figure for profits and track their financial data.
Unfortunately, they just do not give you a good overall picture of where you’re going and the real health of your business. You can get report after report from different software programs, but unless you really know how to translate them; they are almost useless as they do not give you a clear way to determine your market growth strategies. This is where business coaching for small businesses on the Gold Coast could become invaluable and help you achieve profitable growth.
Formulating a workable and practical business plan with a properly thought out budget, careful costing and cash flow forecasts are the only way to achieve profitable growth in any small business.