This article shares several tips to improve your business profits beyond the COVID-19 pandemic effects on the economy. These four ideas are investing in a simple market analysis to understand the new market dynamics, Working towards securing standing orders from clients, embracing technology, and diversification of your business operations.
Whether you are a start-up or a thriving business the goal to survive and make profits is always a priority over the business life cycle. Other secondary goals may be to expand, liquidity, and corporate social responsibility. Huge economic shocks like the economic recession and slow down due to the COVID-19 pandemic usually business operations and performance.
Poor business performance is a direct threat to your business goals. While you are making losses you will have little cash to make prompt payment for your liabilities as they fall due. yet you can remain profitable, liquid, and buoyant in this post-pandemic recovery period through:-
Research & Development (R&D)
In simple terms, we live in a new normal. The pandemic has brought a paradigm shift in the ways that people shop and buy goods and services. In response, businesses are executing newer business strategies to serve them. But which ones are the best for your business, efficient and affordable? To answer these, you will need continuous investment in market research, development, and innovation to tap into new market trends.
A market analysis will help you to determine the existing market potential and the market share you can serve. The market potential is the total cash value that particular industry or sector is worth. It can be a historical figure or a projected value of where the market will grow in the future. On the other hand market share is the piece of cake that your business can serve in satisfaction. You will express it as a percentage or fraction of the total market demand that you can serve. The other aspects of market analysis are the 4 ps of marketing; price, people, place, and product preferences in the market.
In the post-pandemic era, focus and invest heavily in niches with large market potentials. It is the foundation for business profits, growth, and survival. match your product and service offers to match the market feedback to the 4 Ps of marketing in your market analysis report. By implementing your market research report, you can easily beat the competition to attract and retain more customers.
Many businesses exist and thrive by serving a dedicated number of regular clients or patrons. If you acquired some standing orders today, you can easily predict the orders you have to meet daily, weekly, or monthly. You can therefore predict your revenues, cost, and profits. In addition, standing orders help you in managing and planning for your inventory, buying, deliveries, and other business operations.
To sell more and secure standing orders for your business, you should offer better prices, payment terms and give free after-sales services like transport. It will build and strengthen good business relationships between your start-up and clients. Having patron or return clients gives you additional profits by marketing you free of charge. They will refer you to their peers as a superior customer by giving positive word-of-mouth referrals in your absence. you will end up getting more patron customers from their friends and family.
To run a sustainably profitable business, do not put all your eggs in one basket to avoid the risk of losses. It would occur from a simple disruption in business operations and performance from the economic shocks like the COVID-19 pandemic. One simple solution to avoid internal or external shocks is to diversify your operations. As an entrepreneur, you will offer a range of products or services to cushion your earnings from such unpredictability. Offering complementing services to the core goods or services to your business is the best strategy. We give you diversification examples for florists and bankers.
Flower shops can diversify their operations to get more income through free door-to-door deliveries, offering exotic and plastic goods, event planning, offering flowers arranging classes, etc. Banks, Saccos, and Microfinance institutions can earn more than interest revenue from lending by diversifying as follows: engage in insurance, asset valuation, real estate investment, etc.
Automation & E-commerce
Embrace the use of technology to achieve business efficiency and expand your market reach. Two major ways to use technology to increase your business profits are the automation of operations and e-commerce.
In Business process Automation, you will digitize all the repetitive tasks in your business like data entry and sending marketing emails. Benefits of automation include promoting accuracy, saving time and working with less staff to accomplish similar tasks. By freeing over 40 percent of workers tasks they can become more creative and valuable focusing on high-value assignments like research and innovation.
E-commerce will involve you transacting all your business online or over the internet using integrated tools like websites, information systems, and mobile apps. You can therefore cut costs of maintaining brick and mortar business premises. You will receive orders, process them and dispatch them to client doorsteps or pick-up locations. For deliveries, you can use cheap motorbikes riders or drone deliveries as seen in Rwanda. The idea is a necessary step for businesses in food and drinks, pharmacies and supermarkets which face the worst disruption during lockdowns and movement restrictions. To venture into e-commerce without expensive investment, register for free food apps like Uber eats or Glovo.