I hope you enjoy reading this blog post.
I hope you enjoy reading this blog post.

If you want my team to do your marketing for you, click here.

6 Management Skills That Grow Your Business Profit

When it comes to growing your business profit, typical business owners would focus on cutting expenses, increasing prices, and getting rid of staff. But very few think about applying the art of business management into their framework to boost the profit line. 

Business management is the art of optimising yourself, your company, and its available resources to churn out consistent productivity to maximise one’s business’s profit potential. And there are 5 management skills that you can use to help maximise your business profit potential, as follows:

Review How You Treat Your Employees

Have you ever encountered a business where employees talked negatively about the company they worked for: its products, services, and internal politics?

That’s a sign of a lack of care in the business.

Many business owners tend to concentrate on making money and have forgotten to care for and spend time with their employees. As much as your spouse appreciates some tender loving care (TLC) from you, so too with your employees. In the workplace, TLC can be an occasional lunch outing, a drink gathering in a non-office environment, or a non-business chat during business meetings. The key is to break the wall so they can feel at ease with you and to feel appreciated, recognised, and acknowledged. Most of the time, employees can disclose critical information to you that might benefit your business in the coming months. Therefore, start spending some reasonable time with them discussing non-business matters and break that wall. This activity will also soften the professional approach between the two of you when dealing with daily stresses in the workplace. As a result, your employees will feel like a part of one big family.

There are also some business owners who embraced a Master-Slave attitude and treat their employees as dispensable objects. And when the going gets tough, they reduce their salary, make the position redundant and have them reapply on casual employment status. As a result, your people either get demoralised or end up resigning and leaving you to run your show.

If you want profitable growth, the opposite is true; you need to treat your staff as an essential investment, that their contribution is your key to business success, and that they are critical to improving your company’s business profit.

Now there is an exception to this rule. This rule only applies to employees who have dedicated their heart and soul to your company and possess the right attitude, aptitude, and technical skills to help your company grow. Treating them as valuable assets is a sign of respect, your appreciation, and it will only motivate them to give their best for your company. And when they are motivated and loyal to you, your business will scale and together with your profit.

, 6 Management Skills That Grow Your Business Profit

Define Employee Productivity

Boosting your employees’ productivity is another way you can do to grow your business profit.

First, define their output. How do you, and how would your employee know when they are productive? Do you have a set of Key Performance Indicators? Can they see what they must accomplish daily, weekly, and monthly?

Second, you want to ensure that your companies have written policies and procedures and an employee handbook, especially when dealing with tardiness, chronic attendance problems, and managing people who are missing in action (MIA) without notice.

Third, you should ensure that your employees clearly understand their weekly targets and objectives. We suggest you have weekly meetings with them on Monday or Tuesday, doing so will help them stay focused on what’s important and give them the opportunity to ask questions of bottlenecks. You can also use SaaS to track how your employees spend their time at work to see where improvements need to be made.

, 6 Management Skills That Grow Your Business Profit

Hire People With Good EQ.

EQ stands for emotional quotient, which is the ability to manage emotions with insight and wisdom. Great to have, but hard to find in employees nowadays. If you find someone with a good EQ, hold onto them and don’t let them go. 

An employee with good EQ doesn’t get offended easily. Imagine how pleasant it would be to give constructive feedback without walking on eggshells. It’s a blessing. 

On the contrary, hiring people with low EQ can hinder your business potential and affect your business profit. Here are 3 case studies to demonstrate staff members with low EQs and how it would affect your business profit, as follows: –

  1. They get easily offended, curse, become defensive, and throw a tantrum when you give them constructive feedback about their behaviour and performance.
    • People who display this behaviour will bad-mouth you behind your back and undermine your company in front of your customers. If you can visualise them saying to your customers, “Hey, I wouldn’t recommend you buy/stay/subscribe/join/book if I were you”, when they are on the phone, I suggest you trust your feelings and quickly let them go.

  2. They cannot get along with their colleagues. They make spiteful comments and throw verbal assaults at one another; they gossip and argue in front of your customers. I suggest letting them go and getting rid of both, as they are similar. Keeping them will only affect your business profit as customers will shun businesses whose staff are toxic. It is just unprofessional.

  3. A worker displays their violent temperament in front of your customers, and as a result, both end up in a heated cursing argument with other customers watching.
    • It would be ideal to either let him go or second him to another workplace where his assertiveness can be put to good use. Do not keep them around for the long term, as the customer he upset will end up writing a negative review on your Google business.
    • However, there is an exception to this rule, which is when the customer is rude and difficult to your staff member and becomes aggressive towards other customers.

The point is that such unhealthy circumstances could only lead to bad publicity, and if it got out of hand, it would affect your local reputation and, consequently, your business profit.

, 6 Management Skills That Grow Your Business Profit

Inspect And Monitor Your Business Systems

Regardless of your business type, you must have a set of business systems.

If you run a service business, your business systems are the SOP (standard operating procedures), P&P (Policies and Procedures), or business intelligence tools. Moreover, with today’s technology, you can incorporate Knowledge Base software and house all your documented processes, workflows, and how-to videos within the server, hence providing a central point of access to your internal and external stakeholders who are seeking your best practice to execute and resolve their tasks.

Imagine your company keeps recruiting more and more people to keep up with work. But the problem is, the work never gets completed: you still get complaints from customers, and projects and assignments are way pass the deadlines. This could be the consequence of your staff members being unclear about their priorities and KPIs, as a result, they could only operate at 50% of their capacity due to a lack of direction, reporting structure, and technical know-how. If that is the case, how would that impact on your bottom line when it comes to paying that massive payroll that you’ve got?

Moreover, suppose you run a business that relies heavily on machinery and equipment. In that case, your business systems are audit tools, compliance sheets, checklists, assessment software, or diagnostic device to ensure your capital assets are well-maintained and in good working conditions to ensure zero accidents in the workplace. No business owners want to be penalised or forced to shut down by WorkSafe authority because of health and safety violations. Imagine if your business was shut down or served with a notice to cease operation. If so, how would that impact on your business profit?

, 6 Management Skills That Grow Your Business Profit

Be Financially Savvy

To be financially savvy is to be disciplined with your spending.

We all love to spend, most of us. We want the Mercedes, the Porsche, or the latest car model. We love spending money on our family, going on trips, and living a comfortable lifestyle. Some of us even enjoy hiring more staff to appear busy (because we can afford it) or keep collecting new business suits to demonstrate our choice of taste. 

It is challenging to discipline our spending habits. And things can go awry very quickly if we don’t keep a close eye on our spending: default in your payments, accumulating bad debt and interest owed, a few demand letters, and bit by bit, it takes a toll on your financial confidence.

And if you let things continue to fall by the wayside, the lender will seize your car, your credit rating will be affected, and eventually, and the Sheriff will come knocking on your door to confiscate your assets.

Your primary discipline is only to spend the money you’re entitled to: keep your expenses to a minimum, and try not to lose money on hasty or unwise investing decisions such as pursuing another business opportunity that promises you easy profits.

Another way to be financially savvy is to inspect your financials on a regular basis. You should always be aware of the ins and out of your finance and be in control of your financial situation. This attitude means that you should always be mindful of the income generated by your business through regular review of your company’s Profit and Loss (P&L) statement, Cashflow statement, and balance sheet. You should pay attention to warning indications that your business is on a loss, on the verge of bankruptcy, or in severe need of additional funding. You can avoid a lot of headaches if you discover the problem early on if you inspect your financials on a regular basis. 

Furthermore, talk to your accountant to devise a financial strategy to support it. Your financial method can be as simple as spending within the budget, or only spending on things that are itemised in your yearly agreed budget. 

, 6 Management Skills That Grow Your Business Profit

Tighten Your Credit Restrictions

If you’re offering 14 to 30 days credit terms to your customers, you may want to tighten them. Most of the time, they do not pay on time, thus affecting your business profit. 

We recommend not more than 7 days, or if possible, payment in advance before rendering any services. Doing this will help boost your company’s profit because you’ll be able to collect payments sooner and give yourself more time to collect the money owed. It will also help reduce the risk of chargebacks, bad debt, and other issues associated with collecting payments from your customers. 

To tighten your credit terms, you may want to raise your interest rates, shorten the length of your payment terms, or get your solicitor to redraft the contract terms. Credit customers may not like these changes, but they’re necessary for your company to stay afloat.

Conclusion

I hope you now understand that to grow your business profit, you need more than just marketing and sales; but also you need management and financial skills. I invite you to watch my free training/ download > Lead magnet

ABOUT THE AUTHOR

Victor Kon

Victor Kon is a “business builder” entrepreneur, trusted business advisor, and catalyst to your success. He helps entrepreneurs optimize, automate, and grow businesses that can run without heavily relying on sweat equity. With over a decade of experience running successful businesses in a multitude of sectors, Mr. Kon now utilizes the expertise he garnered in those endeavors to help others achieve the same success in their own ventures.
Read More

RELATED POSTS

LET'S TRANSFORM YOUR BUSINESS

Call +61 (3) 9381 7883