Hi there fellow business owners,
The Power of Small Changes in Business
As a business owner, you’re always looking for ways to improve your bottom line. While there are many strategies for growing your business and increasing profits, sometimes it’s the small changes that make the biggest impact.
In this blog, we’ll explore the power of small changes in business and share a real-world example of how three small changes increased profit. We’ll also provide strategies for making small changes in your business, so you can start seeing results today. Whether you’re a small business owner or a manager in a larger organization, the insights and tips in this blog can help you drive incremental improvements and achieve your goals.
Why making incremental improvements is so powerful.
One of the biggest advantages of making small changes is that they’re often easier to implement and less disruptive than big changes. When you try to make sweeping changes to your business, it can be challenging to get buy-in from your team, and it may take longer to see results. On the other hand, small changes can be implemented quickly and easily, and they’re often more sustainable in the long run. Another advantage of making small changes is that they can help you identify areas for improvement that you may not have noticed otherwise. By breaking down your business into smaller components and analyzing them, you may be able to identify inefficiencies, bottlenecks, or other areas for improvement that you wouldn’t have seen if you were just looking at the big picture. With that in mind, let’s take a look at how three small changes had a big impact on the profitability of a construction company.
Real-world Example: How Small Changes Increased Profit by $22,000
Let’s say you run a construction company that generates a million dollars in revenue. Your cost of sales is $300,000, and other expenses are $500,000, leaving you with a profit of $200,000. Now, let’s look at how small changes can impact this business.
First, let’s focus on increasing turnover by just one percent. This might not sound like a lot, but it can have a significant impact on your profit. In our example, a one percent increase in turnover would result in an increase in profit of $7,000. This is a small change, but it can make a big difference.
Now, let’s add in a small change to the cost of sales. If we can increase the margin by just one percent, from 70% to 71%, it would impact the profit by $10,000. This is a significant increase, and it’s all from a small change in the cost of sales.
Finally, let’s look at reducing other business expenses by one percent. This might involve negotiating better prices with suppliers or reducing waste in the business. Whatever the case, a one percent reduction in other expenses would result in an increase in profit of $5,000.
When we add all of these small changes together, we see that they can have a big impact on the bottom line. In our example, just three small changes resulted in an increase in profit of $22,000. This is a significant increase, and it demonstrates just how powerful small changes can be.
Of course, these changes won’t happen overnight. It takes time and effort to increase turnover, improve margins, and reduce expenses. However, by focusing on these areas and making small, incremental changes over time, you can see a significant impact on your business.
Strategies for Making Small Changes in Your Business
So, what can you do to make small changes in your business? Here are a few ideas:
- Increase your marketing efforts: By increasing your marketing efforts, you can attract more customers and increase turnover.
- Focus on improving your margins: Look for ways to reduce costs and negotiate better prices with suppliers.
- Reduce waste: Look for ways to reduce waste in your business, whether it’s through better inventory management or more efficient processes.
- Negotiate better deals: Look for ways to negotiate better deals with suppliers and other vendors.
- Improve your customer service: By improving your customer service, you can increase customer loyalty and generate more repeat business.
These are just a few examples of the small changes you can make in your business. The key is to focus on areas where you can make incremental improvements over time. By doing so, you can see a significant impact on your bottom line.
Take Action and See Results: Start Implementing Small Changes in Your Business
Small changes can have a big impact on your business. By making incremental improvements to your processes, systems, and strategies, you can drive growth, increase profits, and achieve your goals. Whether you’re looking to improve customer satisfaction, increase productivity, reduce costs, or grow your revenue, there are always opportunities to make small changes that can have a significant impact.
Of course, implementing small changes isn’t always easy. It requires a willingness to embrace change, a commitment to continuous improvement, and a willingness to experiment and take risks. However, the benefits of making small changes are well worth the effort.
If you’re looking to make small changes in your business, start by assessing your current situation and identifying areas for improvement. Then, develop a plan for making incremental improvements, and track your progress along the way. Celebrate your successes, learn from your failures, and keep making small changes until you achieve the results you’re looking for.
You can also watch this video here where I talk about this in detail.
Mick
I’d love to help you achieve your business dreams, please don’t hesitate to contact me;
07 5646 4050
mick@ignitionaccountants.com
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