How to Maximise Profit: Business Owners Share Their Secrets
The founders behind fast-growth firms such as CV-Library and HonestBrew discuss the best ways to keep lean and ensure profitability
When running a small business, making a profit is vital to your existence. A constant challenge for any enterprise, it probably serves as the most fundamental thing you strive for as a business.
With only half of small businesses reaching their fifth birthday, we’ve gathered insights from some of the country’s top small business owners on keeping lean, maximising profits and avoiding costly mistakes.
1. Keep it lean
“I think that it’s really about scrutinising spend to some degree. It’s amazing how creative you can be with quite a small budget, and I think one of the things that happens to large businesses is that they lose sight of the ability to do that. I’m always really looking constantly into how to get more value out of the things that we’re doing – particularly in marketing.” – Harriet Hastings, Biscuiteers
“We ensure that our overheads are kept to a minimum, as spending money unnecessarily really eats into your profits. Luckily, as we are a service, we don’t have to worry about storage and over-stocking. However, we do make sure that we keep admin costs such as stationary at a low.” – Husayn Kassai , Onfido
2. Build good foundations
“Take a bottom up approach. It’s hard to become lean from the top down. Improving efficiency starts at the frontline so allow the ideas of outward facing employees flow up the chain.
“Delegating some control and empowering employees to change processes that aren’t efficient can dramatically improve business performance. All business processes should be regularly analysed for efficiency and poor performing processes should be replaced or eliminated.” – Sean Mallon, bizdaq
“Put in a lot of time and effort into creating a very focused business plan. Take out what you need to survive, and then reinvest the cash into the business to fuel growth.
“Finding the right sales people and treating them well is always important in boosting company profits too.” – Ed Lewis, Ali-Quantum
3. Cashflow is key
“Don’t spend what you don’t have. Think about your cashflow and consider every action you take. Even having a wasted meeting costs you money so make sure you stay on top of things.” – Jonathan Bird, Warehouse Dating Ltd
4. Be self-critical
“Being self-critical and seeking continuous improvement is a good way to ensure that every expense you spare is vital in growing your business.
“Not resting on your practices too much or becoming too comfortable in your processes but seeking ways in which you can always improve is a good habit to get into.” – Anthony Adeloye, Gradlancer
5. Understand your numbers
“There are so many factors involved in keeping a business lean, from the beginning I’ve put a big emphasis on keeping a close eye on all invoices, being smart about suppliers and ensuring staff are operating at optimal productivity levels.
“As soon as a small business begins to gain brand awareness suppliers are quick to raise prices – it’s important that every deal you make results in a good margin for the business, don’t be afraid to be aggressive in negotiations!” – Lee Biggins, CV-Library
“Profit margins are the key. Know them and understand them! These affect everything, especially the ability to grow your business positively.” – Leigh Cowell, KingstonMemoryCards.co.uk
6. Test your product on a small scale
“We get stuck in and test on a small scale to get quick learnings. We can make refinements quickly and get things right before scaling. We find this is a cost effective way of developing as spend is only placed once it’s been tested.” – Andrew Reeve, HonestBrew
7. Be open to change
“If you’re naming your business, don’t choose a name that describes what you do. Being a lean start-up means having the ability to ‘pivot’ and change direction. Descriptive names paint you into a corner. Instead, choose a name that’s open to interpretation, and just ‘feels right’.” – Vince Bridgman, Novanym
8. Have the right team
“Create the right team. Planning from the start for the success and hiring the right people at the right time to achieve your aims will make the biggest single contribution to your success in achieving them.” – Martin Campbell, Ormbsy Street
9. It’s all about product
“Focus on making your product better than you think it ever needs to be. Anyone can run a lean business – the challenge is the top line.” – Adam Breeden, Bounce
10. Make sure to keep up with the boring stuff
“Don’t let the boring stuff get brushed under the carpet (anyone can do any unappealing task for 15 minutes) and make sure you broadcast your message as well as narrowcast.” – Pete Walter, Deal With The Media