One of the phrases bandied around a lot over the past decade or two has been ‘low-hanging fruit.’ This refers to opportunities in your business that are just ripe for the picking. You won’t have to do much or pay much to put these changes in place for the benefit of your business.
One of the best ways to spot that low-hanging fruit is to start with your financial statements.
First up: Let’s look at your Balance Sheet.
What under-utilized assets do you have? When you’re looking at your Balance Sheet that is likely things we might call “property, plant or equipment” or, in other words, your tangible assets.
As you’re looking through this, think about your intangible assets as well. These are items that won’t necessarily appear on your financial statement. They include your database, your good reputation, the things you know and intellectual property. For example, let’s say that you wrote a book, or started a series of articles, and the content is just sitting there.
You might even have a database of people who subscribed to the content, bought the book or expressed an interest in getting more information. In these days of hearing people brag about the “hundreds of thousands” of people who listen to their advice, you might feel that the few hundred people that you have aren’t enough to bother with. The reality is actually very different. In today’s busy world, with people who are hit with hundreds of emails a day, the last thing they want to hear is from someone who doesn’t care about them. They don’t want to get inundated with random and useless information. They want advice that is specific to them. The hundred you know is much more a low-hanging fruit then you might realize. Follow up and see what additional products and services you can give them
Second: Take a look at your Income Statement.
There are two ways to have more money, as evidenced by your Income Statement. You can make more income or you can pay less expenses.
When it comes to making more money, then are two primary ways to do that:
Sell more to existing clients and customers,
Increase the number of existing clients and customers.
And then there are probably a hundred examples of low-hanging fruit in each of those areas. A lot of people are looking at the Internet these days to make more money. I moved my regular CPA company, which provided typical services, into more of a commodity model over 10 years ago. Three years ago, we went completely virtual with ultimately a full service tax practice and dozens of websites that provide tax, financial and business courses and seminars.
If you don’t have a website, starting one now can be the most powerful thing you can do. We happily recommend the experts at LatAmConnect.
(1) Make sure your page is optimized for the smallest screen size of your customer base. Normally this means making sure when someone using a 1024×768 (which ironically is also the screen size of the new iPad) and that people can see the product info and make their buying decision (including the buy button) without scrolling.
(2) Does your site convey trust?
(3) Does your site make it easy to contact you? (Including a physical address?)
(4) Are your shipping costs spelled out clearly so there’s no surprises during checkout?
(5) Does your site convey security?
Third, use your Income Statement to identify cost-cutting measures.
If you have one, here are some basics of low-hanging fruit for optimizing your site.Here are some tricks to get you started
- Look at your business like an outsider would. You may want to hire a consultant for this step, or do it yourself. But the key is to evaluate what it is you do and how it’s done. Diagram the steps. What can be eliminated? What can be done cheaper?
- Ask your employees for suggestions on ways to cut costs (and save jobs and/or use part of the savings for a nice reward)
- Take a look at your office supply costs. When I took my business virtual, we had a lot of cleaning out to do. One of the things we discovered was that the person in charge of office supplies ordered a new case of sticky notes every time they couldn’t find a pad of them (instead of looking).
Now, three years later, we still have CASES of sticky notes. It’s the joke in our house that one year we’ll give them out for holiday presents. I just wonder how much in excess office supplies I paid for because of poor systems and employee laziness.
- Before you launch your cost cutting program, make sure your employees know why it’s so critical. If it means the difference between keeping the doors open and not, they need to know that. But of course, they’ll want to know what’s in it for them. Will salaries increase? Will benefits continue?
Finding the low-hanging fruit in your business starts with understanding where you are now. And that means you need to understand your financial statements first.