Welcome to this week's episode of the I Hate Numbers podcast. We are excited to share four steps to increasing your profits. Accordingly, these steps will help you keep more of the money you make. Moreover, they are designed to ensure your business thrives, despite external challenges. Every business faces numerous challenges, from changing customer habits to financial pressures. However, these challenges impact profitability. Therefore, adapting to these changes is crucial for survival and growth.

Step 1: Focus on Customer Retention

Firstly, focusing on customer retention is vital. It is often said that retaining existing customers costs significantly less than acquiring new ones. Indeed, repeat customers spend more, leading to higher profits. Additionally, maintaining a strong relationship with your customers through regular communication, such as newsletters and loyalty programs, can enhance retention.

Step 2: Effective Marketing

Secondly, effective marketing goes beyond posting on social media. It involves understanding your customers' needs and pain points. Identifying your ideal customer allows you to target your marketing efforts more effectively. Consequently, this focused approach leads to better engagement and higher sales.

Step 3: Streamline Operations

Thirdly, streamlining your operations can significantly boost efficiency. Using technology, like digital accounting systems, simplifies record-keeping and invoicing. This blend of human effort and technology reduces stress and frees up time for business-building activities. Consequently, it enhances your overall profitability.

Step 4: Improve Cash Flow

Lastly, improving cash flow is essential. Proper cash flow management ensures your business has the resources it needs to operate smoothly. Using tools for financial planning and maintaining strict invoicing practices can prevent cash flow issues. Therefore, focus on cash flow to keep your business financially healthy.

Conclusion

In conclusion, by focusing on customer retention, marketing effectively, streamlining operations, and improving cash flow, you can significantly increase your business's profitability. These four steps to increasing your profits are practical and achievable. If you found this episode useful, share it with others who might benefit. Lastly, don't forget to listen to the I Hate Numbers podcast for more insightful episodes. Happy profit generation!

Useful Links

• Budget Whizz
• I Hate Numbers
• Numbers Know How

Increasing the profitability of your business is the topic of this week's I Hate Numbers podcast. In fact, I'm going to give you four steps that you can do to turn the profit that you're making at the moment, and hopefully, you are making profit into something more.

You are listening to the I Hate Numbers Podcast with Mahmood Reza. The I Hate Numbers podcast mission is to help your business survive and thrive by you better understanding and connecting with your numbers. Number love and care is what it's about. Tune in every week. Now, here's your host, Mahmood Reza. Now,

your small business may be turning over a decent sum of money as it is. The revenues may be there. But how much of it do you actually get to keep for yourself? How much of that do you generate by way of profit? Revenue and profit aren't the same thing, and profit should be the prize that you're going after.

Now, your business, like many others, will have many challenges. No business really operates in a vacuum with those landscape challenges, in terms of people's buying habits, in terms of how customers react, in terms of financial pressures. It's going to be facing all businesses, myself included. This can have a serious impact on your level of profitability, your ability to survive and thrive.

And in this I Hate Numbers podcast, I'm going to outline four steps that you can take to keep more of that money that you make. Those four steps are as follows: step number one, focus on your customer retention. Now, many businesses always like to build up their client base, go for new customers and clients.

And obviously, that's a recognisable and that's obviously a good thing to focus on. However, when you want to increase your profitability and get the maximum return on investment, or ROI, as some people would say, then keeping and delighting the customers you have at the moment, is a fantastic way of doing this.

Now, did you know it costs five times as much to attract a new customer as it does to hang on to your existing ones? Repeat customers, it's been said, spend 67 percent more with you than new ones will do. So therefore, increasing your customer retention rate, you can spend less money, invest less money, and generate more profit for your business.

Also, it's been less stress and strange. Look after what you've got, and that profit will be seriously impacted to the positive. There is a study by Bain & Company that estimated that increasing your retention rate on your customers, cutting down what we might call churn by just 5%, can have an impact on your profitability by a positive 25 to 95%.

Those are some decent numbers. One way to keep customers coming back for more is to obviously deliver a good service to them, but keep them and keep yourself in the forefront of their focus. So, what's your communication strategy? How do you communicate with them? Do you communicate with them once a year, irregularly?

Do you use newsletters? Do you have discount codes or loyalty schemes? What's the way that you keep your customers engaged with you? And that's an area that you can certainly work on. In my own business, I Hate Numbers and Numbers Knowhow we send out weekly newsletters, publish regular blogs, communicate, respond to our clients as promptly as possible, have website resources, and the like, adapt those to your own calling.

Step number two, marketing. Now, marketing is not the same as posting social media ads. It's about identifying what your customer wants, what their pain points are, what they require, and you delivering what that need is. That simple idea of needs and wants goes a long way. Now, when done correctly, marketing will generate some value for your business.

It does a lot more things apart from making people aware, but it actually encourages and gets people to engage with you and ultimately buy from you as well. Don't look at marketing as a cost. If done correctly as an investment, that can generate that return. Now, the difficult thing to do initially is to identify who you consider to be your ideal customer.

If you think your business offer is for the whole world, then you're going to be sadly disappointed. That's too generic, and that means that's going to impact on your messaging, your communication, and what you try and do. Trying to be everything for everyone means that you end up disappointing more than you think you do.

So generalised approaches work for a commodity, perhaps where there's no identifiable difference. But for most businesses you need to be more focused and more specific about who your customers are, what their pain points are, and what the transformation is that you can be doing. Step number three, efficiency. Streamline your operations as best you can.

Now, for me, it's a blend of the human and the technology. So, for example, in terms of your own record keeping, having a digital accounting system goes a long way to not only just keep those records accurately, give you data for good information for decision making, but also you can use that to issue invoices.

You can use that to integrate with a variety of other apps. If you're involved in a manual process and you're thinking of saving time, so you might be running a home business, for example, where you're packaging up products. Well, consider. By the time you factor in the walk down to the post office, by the time you consider all those other elements there, are there better ways that you can do that?

Think about your onboarding operations, the way you communicate with clients and customers, and in I Hate Numbers, we've helped loads of clients over the years identify the processes they've got in there, flowchart them, think about where those efficiencies can be made and that time saving translates into hard cash.

It frees you up to spend on business building, engaging with customers, and also reduces the stress and load on your brain. We live in a very technology-driven age these days, but remember, it's the blend of the human and the technology that you wish to do. Now, step number four, improve your cash flow. Cash is the ultimate decider of whether your business continues and prospers or whether it fails and doesn't survive.

Cash flow is not the same as profit, and improving your cash flow can impact in a positive way on your bank charges, your financial charges, you have that available pool of resources to tap into. You don't need to actually tap into your credit cards or your bank overdraft, and that's going to be a positive thing.

Now, if you check the link in the notes at the end, folks, have a look at Budgetwhizz, our online financial planning platform, and you'll find that that's going to be a great benefit in terms of cash flow planning and making those decisions that you need to. Staying on top of your invoices, encouraging those customers who are a little bit more slow in paying themselves, in paying you in bulk or annual discounts, maybe charging late payment fees, getting deposits where you can, it's a great way to accelerate that cash flow.

If in doubt, speak to your accountant, get some advice and input from them. If you feel you want to get in contact with us to find out more, I'll be happy to talk. So what do we say, in essence? Well, in summary, customer retention, marketing, streamlining your operations, and focusing on cash flow will be four things that you can do that will have a positive impact on your bottom line.

And by bottom line, I mean in terms of making and keeping more profits. As I said, check the show notes, there's a link at the bottom that we have a waiting list for fantastic new innovation that we're introducing in the next few weeks. We'd love it if you could click that link, if you found this episode useful, love it if you could share it with those who will benefit until next time, folks, happy profit generation.

We hope you enjoyed this episode and appreciate you taking the time to listen to the show. We hope you got some value. If you did, then we'd love it if you shared the episode. We look forward to you joining us next week for another I Hate Numbers episode.