By Angie Brown
After facing extraordinary challenges, you’re ready to move beyond survival mode and focus on growing profitability. Three key strategies can help you achieve this goal: increasing efficiency, driving revenue growth, and reducing costs. While implementing all three is ideal, you may want to first determine your business’s unique needs by asking a business advisor to conduct an assessment.
Adapting operations to increase efficiency
Now may be an opportune time to improve your business’s efficiency as we navigate the next phase of economic recovery. Business owners have access to tools that can create efficiencies by streamlining, outsourcing, or automating tasks. For example, it’s now easier than ever to use technology for supply-chain issues such as order-taking, processing, and delivery.
Driving revenue growth
E-commerce is another tech-driven tool that can boost revenue for small- and medium-sized businesses. According to Statistics Canada, 16.7 percent of businesses had an online sales platform or had plans to implement one as of early 2021. This doesn’t mean that you must build your own from scratch—working with a service provider can help you keep costs low.
There are other ways to boost revenue:
offering coupons and loyalty programs
bundling products or services
adding complimentary offerings
expanding your geographic market area
forming partnerships with other businesses
altering your pricing model
Some strategies have implications for cash flow and taxation. For example, expanding your sales in another province(s) or overseas could result in additional tax requirements. With all tax matters, it’s best to speak to your advisor to ensure you’re prepared.
Depending on your line of business, significant costs may include inventory, leasing of real estate and equipment, administration, labour and—particularly in the wake of the economic downturn—debt servicing. The steps you take to control these costs should align with your strategy for future growth. Confirm that your plans can support the business model you want to have a year from now.
You may be able to reduce costs related to leased space by shifting to more virtual work, digitizing files, and taking advantage of cloud-based tools to automate routine tasks. An e-commerce strategy may also give you more flexibility while lowering the cost per sale in some cases.
Debt is another significant cost for many business owners—particularly for those who borrowed funds to survive the pandemic.
A debt advisor can assist you in several ways, including helping with renegotiating credit agreements or finding options that you were not aware of, such as lower rates or term changes. It’s also important to look for someone who can prioritize goals in complex situations and work with your lenders to find the best path forward for your business.
Have questions? Let us help.
Restoring profitability can be a complex balancing act—but you aren’t alone. We understand the issues that affect your business and will work with you to find the best way forward. Whether you’re focusing on reducing costs, improving operational efficiency, or driving revenue, our advisors are in your corner.
Angie Brown (CPA, CA, CIA) is a leading business advisor with Grant Thornton LLP in St. John’s. She is an agile professional with over a decade of accounting and corporate finance experience. Angie creates value for her clients through business planning, financial modelling, buying and selling businesses, feasibility analysis and cash flow management. Whether you’re just getting started, expanding a current opportunity or selling your business interest, Angie and her team have the expertise to help you navigate through all levels of change. Contact Angie Brown at Angie.Brown@ca.gt.com or +1 709 778 8841.