This weekend there will be lots of bonfire nights happening all over the UK and it’s prompting me to ask the question, ‘where are you burning cash in your business’?
I asked this question yesterday in a workshop I facilitated at the FIS (Finishes and Interiors Sector) Conference in Manchester which was all about how you can be more profitable in 1 hr. The theme of their conference was about growing your business in a changing market.
These are uncertain times we are operating in and we don’t know exactly what the impact of Brexit will be, but there are things that you can control that will make a difference to your profit margins.
The phrase ‘burning cash’ originated from one of my Clients and it’s about where you are wasting money, time and resources in your business.
The four key areas I look at when I’m working with companies are:
Purpose (which I talked about in my blog last week)
All of these impact on your profits.
If you don’t have a clear sense of purpose and direction it’s hard to motivate yourself, let along your employees and it should never just be about the money.
Productivity is a massive challenge in our industry. If people feel part of something and they are working towards a common goal, they are more productive. It’s also about having clear roles and responsibilities and being able to get the best performance out of your employees.
Not having the right processes in place can hugely impact on resources and waste time and money. As businesses grow and expand what worked in the past may not work in the future and it is definitely worth mapping out your processes to make sure they are as efficient and effective as they can be.
Here are some of the areas I’ve helped my Clients identify where they are ‘burning cash’:
- Employees / Sub-contractors leaving early to get cheaper trains out of London – £21k / year.
- Lack of productivity from sub-contracted stone mason – 12k in 13 weeks.
- Not putting together programmes and having the right contractual arrangements in place – thousands of pounds of acceleration costs.
- Not being organised with materials – 1 day / week at the Builder’s Merchants.
Every business will be different depending on the size and type but there will definitely be areas where you are wasting money, time and resources, the question is where?
To help identify these areas I’ve devised a tool called the ‘Profit Wheel’. I go through this in my 1hr to Change webinar below and if you want to fast forward directly to that, it’s around 42 minutes in. I’m saving you time already!
I hope you have a great bonfire weekend and with the money you will save in your business by doing this exercise, you can spend more on fireworks next year!