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RING IN THE NEW YEAR WITH A RENEWED FOCUS ON PROFITABILITY
BY HUTCHINSON AND BLOODGOOD | December 30, 2020 | TAX TIPS
 
 
 
 


Some might say the end of one calendar year and the beginning of another is a formality. The linear nature of time doesn’t change, merely the numbers we use to mark it.

Others, however, would say that a fresh 12 months — particularly after the arduous, anxiety-inducing nature of 2020 — creates the perfect opportunity for business owners to gather their strength and push ahead with greater vigor. One way to do so is to ring in the new year with a systematic approach to renewing everyone’s focus on profitability.

Create an idea-generating system
Without a system to discover ideas that originate from the day-in, day-out activities of your business, you’ll likely miss opportunities to truly maximize the bottom line. What you want to do is act in ways that inspire and allow you to gather profit-generating concepts. Then you can pick out the most actionable ones and turn them into bottom-line-boosting results. Here are some ways to create such a system:

Share responsibility for profitability with your management team. All too often, managers become trapped in their own information silos and areas of focus. Consider asking everyone in a leadership position to submit ideas for growing the bottom line.

Instruct supervisors to challenge their employees to come up with profit-building ideas. Leaving your employees out of the conversation is a mistake. Ask workers on the front lines how they think your business could make more money.

Target the proposed ideas that will most likely increase sales, cut costs or expand profit margins. As suggestions come in, use robust discussions and careful calculations to determine which ones are truly worth pursuing.

Tie each chosen idea to measurable financial goals. When you’ve picked one or more concepts to pursue in real life, identify which metrics will accurately inform you that you’re on the right track. Track these metrics regularly from start to finish.

Name those accountable for executing each idea. Every business needs its champions! Be sure each profit-building initiative has a defined leader and team members.

Follow a clear, patient and well-monitored implementation process. Ideas that ultimately do build the bottom line in a meaningful way generally take time to identify, implement and execute. Don’t look for quick-fix measures; seek out business transformations that will lead to long-term success.

Many benefits
A carefully constructed and strong-performing profitability idea system can not only grow the bottom line, but also upskill employees and improve morale as strategies come to fruition. Our firm can help you identify profit-building opportunities, choose the right metrics to evaluate and measure them, and track the pertinent data over time.
© 2020

 
 
 
 
 

HOW CAN WE HELP?

With the uncertainty of the situation surrounding coronavirus (COVID-19) continuing to evolve, we understand that it is affecting businesses and individuals in many different ways. 

At Hutchinson and Bloodgood, we value the relationships we have built with you. We will continue to be accessible so that we can serve and assist you while providing the level of attention that you deserve.

We will work alongside you throughout this ongoing situation to develop and build the optimal solutions for you.

Please contact us with your questions and concerns.

 
Disclaimer: This material has been prepared for informational purposes only. It is not intended as a substitute for speaking to your accountant, tax planner or financial planner. All information is provided “as is.” With change happening on a daily basis, we do not guarantee completeness, accuracy, timeliness or results obtained from the use of this information.
 
 
 
 
 
 
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