Here at Blue Onion, we look at the fundamentals of a business in order to see where it might be able to improve. Is a company growing efficiently and are they taking all factors into consideration of their actual business? Are they focusing on margins?
Currently, a pressing concern for businesses is inflation. With consumers feeling the pinch in their wallets, spending habits are taking a hit. As prices surge, it becomes a battle to protect your margins. Consider these quick and effective strategies for enhancing internal workflows:
Prioritizing Essentials
So, as consumers start tightening their belts and asking “Do I really need this product?” companies must go back to basics, back to products and actual margins, and get an understanding of what makes sense.
For instance, numerous brands tend to overload their product lines. They strive to offer every conceivable flavor or color for a single item, which may not always be practical. Ever analyzed which products truly drive your sales? Identify the 20% of products that contribute to 80% of your sales. The crucial aspect lies in grasping what your consumers genuinely desire and concentrating your efforts on what is truly profitable.
Drilling into the Finer Cost Details
At the same time, you also need to know what you can do to alleviate some of your costs. It starts with putting yourself in your customers’ shoes. Do you truly know what they want? Get creative with promotions that will actually relate to your consumers.
We always advise our customers to dive into their profit and loss statements starting from the top. This can spark ideas for boosting sales. Yet, fixating solely on top-line sales is a misstep. Ensure that any efforts to boost the top line also lead to a stronger bottom line.
Flexibility Across the Board
Look to your employees, as well. Can they do multiple jobs? Can you assist them in any way to be more productive? Flexibility right now is key, and that comes from your people. The fewer people you need to run your business, the more you save. Businesses also should get an understanding of what their true return on ad spend is. Make sure you truly calculate the cost of generating your gross revenue. Do you know your true selling cost? Think about all the fulfillment costs, all of the selling costs, any of the discounts that went into it, and any free product that you had to give away. You might be shocked. From there you can really understand what you need to weed out.
When it comes to running a successful business, having a strong and versatile team is a key factor. You should look to your employees not just as workers, but also as valuable resources for your company's growth.
One important aspect of productivity is being able to perform multiple tasks. If your employees have the ability to handle different responsibilities within the company, this can lead to increased efficiency and cost savings. It may also be worth investing in training programs or tools that can help your employees develop new skills and take on additional roles.
