Frank X Acocella, CounselPro Lending, on Business Strategies

There are a lot of moving parts to any business. That’s what makes running a successful business complex and difficult, but it also provides a lot of options to tweak the business toward profitability. One of the biggest things that affect any business strategy is sales and profits, which can often be confused by entrepreneurs. But if you want your business to be successful, you have to run a profitable business. The following three strategies can be executed immediately to improve the bottom line of any business.

Rule of 3%

It’s usually not just one area that has to be improved for a business to become profitable. In many cases, shifting any area in a positive direction even just a small amount can have a huge cumulative impact.

Some call this the rule of 3%. 3% isn’t a huge improvement for any single function, but when it’s all added up, it can have a significant impact.

For example, what would increasing prices 3% do to the margin? In many cases, it would have a direct 3% increase in profitability. The same goes for reducing expenses by 3%. For most businesses, if they gave it a good effort, they would be able to shave 3% off their cost structure.

Improve Credit Score and Financing

Most businesses struggle to get profitable because they have short-term cash flow problems. Even a short-term cash crisis can lead to diminishing profit margins and ultimately to bankruptcy.
A big part of improving the cash flow is to improve how the business is financed. Companies with stronger cash positions are better able to take advantage of new investment opportunities that lead to larger profit margins.

That is why it is important for a business to improve their business credit score and is something that any organization can do intermediately.

In addition to better access to financing options, many large enterprise customers will check the credit score of a vendor before buying from them. Having a poor credit rating could cost large contracts with these large, lucrative businesses.

Any small business can testify to the fact that these large businesses are where the profits are made. They tend to pay higher prices and larger volumes. By taking advantage of the premium in price and economies of scale built into large volume orders, even small businesses can quickly become profitable.

Reduce Overhead with Outsourcing

With the advent of the internet, even small businesses can leverage the power of globalization and outsource much of their work. There are options-galore when it comes to outsourcing beyond building a factory in China.

For example, a small business can hire a virtual assistant in Southeast Asia for $1,000 to operate the same functions as someone in American for $3,000. There are also graphic designers that will create a logo, brochure, business card or any other marketing material a business needs at a fraction of what it costs to hire a graphic designer on staff in the West.

These three ways can help any business turn a profit. These tactics don’t require a lot of time or overhead. They just require a bit of action.