It’ll come as no surprise that with profits of $57,411 million, Apple was the most profitable business in the United States in 2021.
OK, most businesses won’t ever generate that level of market value. But there are lessons all businesses can learn to help them maximize their bottom line. Are there some sneaky factors you haven’t accounted for that are affecting the profitability of your business?
Let’s delve into 5 factors that affect your bottom line, and see what you can do about them.
1. Employee Turnover
HR departments consider low employee turnover to be an effective measurement of business success. But in reality, the question should not be, what is our employee turnover rate? Rather, it should be, what is the cost of our turnover?
It could be that the following costs are impacting your bottom line:
- Cost of replacing an employee
- Cost of training others to plug skills gaps
- Cost of lost employee morale due to frequent departure of colleagues
While no turnover is also unhealthy, it’s important to analyze the reasons why you can’t retain staff. Addressing these issues could be a lot more cost-effective than constantly hiring.
2. Management Efficiency
Is your company using the right tools to manage the business efficiently? Many companies use ERP software to streamline business management functions. This can include purchasing, sales, HR, and marketing.
The problem is that old ERP software can let the side down and affect your bottom line. For example, recent changes on the global scene have impacted the oil and gas industry. Upgrading your oil & gas ERP could help you protect your bottom line in a way that legacy software can’t.
3. Overhead Costs
The static nature of overhead costs can cause them to impact your bottom line. Many companies have felt the pinch during the pandemic. Shelter-in-place orders kept workers at home and reduced their productivity.
The one thing that stayed the same? Their facility costs and debt financing arrangements.
Revisiting these static costs could help you to keep your business viable during lean periods. Negotiations with landlords and banks may help you to reduce the burden – at least temporarily.
4. Public Image
Marketers recognize that public image matters. That’s why the world’s most profitable company, Apple, will spend over $500 million marketing a single product, Apple TV+.
Your public image is built from much more than marketing alone. Consumers create an impression based on factors including:
- Employee attire
- Customer service
- Website
- Cleanliness of facilities
- Quality of products
Get any one of these wrong and your bottom line will suffer. Take the time to curate a brand image that projects the right impression to your customers.
5. Sluggish Website
Here’s a surprise one for you. Whether you’re selling products or services, customers expect your website to load fast. Keep them waiting for just a few seconds, and they’ll lose interest and look elsewhere.
Also, if a customer has issues with a website, such as a clunky ordering process, they won’t be back in a hurry. Invest in having the most user-friendly website possible to capture and keep your customers’ interest.
Keep Your Bottom Line in Great Shape
Everyone goes into business for the same reason – to make money. Protecting your bottom line starts with identifying threats to it and taking action. Do this successfully and you’ll maintain your profit margins, even in these tough trading conditions.
Would you like to see more helpful hints and tips to keep your company in great shape? Head over to our Business section today!