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Tips to Improve Profitability

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Tips to Improve Profitability

"Sell more, spend less." 

If only it were that easy to improve your profitability. (Even if it were, selling more and spending less aren't easy, either.) 

Even if your security business closed out the year with record profits, there's no guarantee that last year's results will translate into this year's success. Growing your customer base is always top of mind, but there are many other strategies for improving your profitability.  

Here are a handful of helpful tips, many of which can take pressure off your sales force while also empowering non-sales staff to impact the company's profits. 

Redesign workflows and systems for greater efficiency. You don't have to hire a Six Sigma Black Belt™ to improve your processes, but let's examine how things get done. If many people perform the same activity using the same steps, you can find ways to optimize, reorder, or eliminate those steps. If many people perform the same activity with different steps, it's clear that you don't even have a process, so start by establishing a consistent process before seeking improvement. Consider project management tools to keep stakeholders accountable and tasks moving. If you have a cobbled-together infrastructure with gaps or where programs or systems tend to clash, it might be time to invest in more efficient software. 

Prioritize. Whether it's "I can't boil the ocean" or "I have only two hands," we all know the feeling of being unable to do everything at once. (And when you try to accomplish everything, you often accomplish nothing.) Focus your best efforts, talent, and attention on selling your most profitable services, customers, niches, or channels. At the same time, maintain the right balance of short- and long-term projects to ensure both quick wins and a fruitful future. 

Make a Happy Meal. Who doesn't love a deal? Price bundling allows you to sell more higher-margin items or services by offering customers a discount. For example, you can package video monitoring with patrol services. This increases customer satisfaction, and they will likely spend more than they would if they were making à la carte purchases. You can also move low-selling products or less popular services by adding them to the bundle. 

Lower your overhead. Welcome to the "spend less" part of this list. Overhead costs refer to anything not related to the production, marketing, and selling of your goods and services. This includes rent, insurance, software, networking infrastructure, and accounting.  

Some adjustments, such as finding a line of credit with a lower interest rate, may be easier than others, such as moving your business to an office with lower rent. You also might be able to negotiate service contracts, outsource specific tasks rather than have them performed by full-time employees, or hire an accountant or advisor to identify other ways to reduce your overhead. 

Prevent overtime from going overboard. Overtime offers your guards schedule flexibility and the opportunity to earn more. However, it is as reckless as running the bathroom faucets all day when it isn't controlled, regulated, or measured. Use technology such as workforce management software to identify excessive overtime — and use the analytics to inform your scheduling decisions. You'll also improve performance, reduce the risk of fraud or employee lawsuits, and foster a better work experience. 

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Spurn the churn. The number of new customers you landed last year tells only half the story — how many did you lose as well? A retention strategy is an investment that not only keeps current clients in the fold, but can turn them into repeat buyers, sources for new leads, and your most prominent brand evangelists.  

Get everyone on board. Employees who aren't in sales or don't directly bring income to the company can still impact its profitability. Launch an awareness campaign that empowers everyone to do their part to boost the bottom line. It's a great way to improve the culture and instill a sense of ownership in everyone. 

  

Every security business can benefit from a bit of belt-tightening, but you don't have to make drastic decisions such as cutting benefits or reducing the workforce. Take a little time and effort to discover efficiencies within your current business model, and you'll feel as if you lifted a sofa cushion and found some change — or a ton of cash! 

Thinkcurity Articles
Thinkcurity Articles
Thinkcurity is revolutionizing education in the physical security industry through engaging content and thought leadership in every aspect of running a successful security operation.

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