How To Avoid Costly Mistakes And Run A Profitable Business

Run A Profitable Business

Let’s be honest. There’s no simple way to run a business. If it were simple, everyone would be doing it.

Starting and operating a profitable business is not easy these days.

However, there are a few strategic ways to business planning that streamline the method of operating a profitable business and at the same time do away with costly mistakes.

There are a few ways business owners can implement their strategies which will distinguish between a booming business and one that’s simply making an attempt to survive.

Fortunately for you, through our in-depth analysis and study, we’ve discovered 3 proven ways which are a game-changing factor that aids business owners who are result driven just like you to achieve an optimal result in running their businesses and increase revenue.

3 proven ways of saving money and raising profits

Minimum Viable Product (MVP)

According to Google, their first version of Gmail was written in a day.

It wasn’t a perfect version with all the superb filters and intelligent usability we tend to expect from it these days.

it absolutely was merely ok to let the individuals creating it live the demand for a more robust email system.

Gmail isn’t the sole product that started with a Minimum Viable Product (MVP).

Listed below is a list of five (5) companies that started via Minimum Viable Products that you’ve perhaps heard of in the past.

Twitter

Twitter traces its origins to the podcasting podium Odeo.

When Odeo initiate the ground, beneath slipping away after Apple trod into the podcasting game with iTunes, the company started running hackathons to come up with ideas of what next to do.

One result of this was an idea for sharing updates with a group of individuals via text messages, codenamed “twttr”.

Airbnb

Brian Chesky and Joe Gebbia In 2007, had an idea to start a business but were unable to fund the rent of their San Francisco apartment.

There was a design conference about to happen in town, and they decided to open their loft as cheap accommodation for conference attendees who had lucked out on the hotels nearby.

They took pictures of their apartment, put it up on a meek website, and soon they had 3 paying guests for the duration of the conference, a Boston woman, a man from Utah, with another man who was originally from India.

Buffer

The buffer is a simple app that allows you to schedule your social media posts across different platforms,

basically letting you space out your updates so that you don’t flood people’s newsfeeds at one point in the day with interesting stuff you want to share.

When starting out, Joel Gascoigne, Buffer’s founder, didn’t want to get stuck building a product no one wanted to use. So, he began with a simple test.

Dropbox

According to Eric Ries, co-founder/CTO of IMVU, In his book – The Lean Startup, talks about how Dropbox attempted the question of market viability by demonstrating their product in a video.

To respond to the question of if customers will want to use and pay for their file-sync solution and to justify the market to investors,

Houston and his team had to “get out of the building” and put their proposed user experience in front of real users to get feedback.

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Instead of excavating into servers and building a high-availability, low-latency, always-on network even before they had any clue people would use it, the team decided to try something else.

Groupon

Andrew Mason started with a website known as The Point, a platform to convey people together to achieve things they couldn’t do alone, like fundraising or boycotting a retailer.

But the site wasn’t gaining much thrust, so they decided to try out something else.

In the technology startup world, MVP products refer to a product with imperfect features set to give ‘just-enough’ functionalities for the developer to test its products in the market

and modify it along the way with new ideas as the emerges. In retail, a similar principle is applied.

For example, if you own a restaurant or food truck and wish to check out a new specialty drink or superb dessert-based empanada formula,

you’ll generate a buzz regarding your latest and greatest through social media, your website, and even old-style signpost.

Advertise it as a restricted time item, obtain enough ingredients for a collection quantity and see however well it will do.

If you sell out and therefore the demand outweighs your offer, then you certainly have a winning product on your hands!

Don’t worry, if you don’t sell out, however, generate some buzz and interest, keep it going and see however that interprets into actual sales.

The same tactic can be useful to retail stores.

If you own a retail shop and you wish to check the market’s interest in a new product line, you’ll trade through similar social channels, website, and in-store awareness ways.

Get many samples (or discount) from your seller within the commonest sizes and see however quickly it sells.

If it flies off the racks, it’s safe to mention you’ll place your initial order. If it sits there through next season, you’ll toss it on the discount rack and chalk it up to a lesson learned.

Whether you’re just beginning in retail stores, or already a veteran that desires to execute some changes to your existing business, implementing MVP approach minimizes your risks.

For example: If you wish to introduce a new product in your business, don’t exit and pay thousands of bucks for new inventory.

Instead, talk over with your vendors and see if you’ll receive many samples and take a look at the waters by seeing however they sell before committing to an oversized order.

Eliminate Waste

This is one of the basic ways of learning to run a profitable business and therefore the foundation of changing into a lean merchant.

Think of it as a minimalistic approach to your business associate degreed an extension of the minimum viable product principle.

Something in your business that doesn’t add price, or isn’t a catalyst for your bottom line, in all probability doesn’t have to be compelled to be there within the 1st place.

Waste may be something from wasted footage in your brick-and-mortar store to underutilizing your employees’ talents, to having an excessive amount of inventory there.

All of those can have a negative impact, either directly or indirectly, on your bottom line.

So, whereas we’ve got you considering it, take away a pen and paper (or your phone) and create an inventory of the items that do not contribute to your revenue or are underutilized.

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3 to 5 things could be a smart start line. Once you have got your list, place confidence in however you’ll be able to decrease or extract a lot of price from every part.

Listen to your Customers

Your customers are the bread and butter of your business and play a large role in driving profits and sales.

Without your customers, there would be no business to do. You don’t wish to travel down the sphere of Dreams road and expect that, “if you build it, they’re going to come back.”

This is not a Nollywood blockbuster, and your customers don’t seem to be actors. Your customers are real people who recognize what they need, and if they can’t grasp it from you, they will go elsewhere to get it.

Unless your product is actually distinctive or industry-changing, there’s a decent probability somebody has done it before.

However, no one has done it quite such as you. If you listen rigorously to the strain of your customers by engaging them in tête-à-têtes, spotting their behavior in-store,

Or maybe through accidental prying, you must be ready to gain higher insight into what they need.

Also, don’t be afraid to require a lot of formal approach to understanding your customer’s desires.

Classic strategies similar to a client survey are forever a decent thanks to facilitating establish what customers like and dislike concerning your business, still as what drives them to buy there.

With tools such as Survey Monkey and Google forms, you’ll produce and distribute surveys with ease and build smarter decision-making habit based on the response data.

Once you’ve collected the insights, either formally or informally, it’s up to you to repurpose that info and switch it into actionable things that may improve client fulfillment, improve retention, and ease your drive for a new business.

What is a Lean Business

Now that you simply apprehend three tried strategies for saving cash and raising profits, you’re well on your way to knowing how to run a profitable and lean business.

however, what precisely could be a lean business?

As antecedently mentioned, the underlying ideology of a lean business is to maximize worth and eliminate waste.

A lean business suggests that generating a lot of worth for your customers with fewer resources. reasonably appears like a catch.

However, trust us, it is often done — and it is often done effectively.

Benefits of Running a Lean Business

Regardless of the business, you are in, there are many benefits to implementing a lean business strategy. Since we have a tendency to may get frenzied,

Here are just our top three.

  • Efficiency: Eliminating waste and redundant elements, can by default build your business and make it more successful. there’ll be fewer factors and puzzle items to exchange hands between internal and external agents. this may lead to a lot of economical business method and will be something from automating your selling efforts to electronic invoicing.
  • Reduction of value: making a lot of cost-effective business can lower prices. this might be operational prices, labor prices, or perhaps product prices, depending on how the strategy is being by you. By removing inefficiencies, you may ultimately see the positive result it’s on your bottom line.
  • Agility. Lean businesses area unit usually a lot of nimble and may quickly adapt to changes because there are fewer obstacles to ‘waste’ in their method.
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Potential Pitfalls to Profitable Business

While many common mistakes can derail the success of your business

The largest potential pitfall for operating a profitable business and implementing a lean strategy is thinking once you’ve achieved your goals, all the toil is finished,

And you’ll fancy the ride on a controller. therefore, before you even let that thought enter your head, we would like to mention, “STOP!”

Don’t go from now on and don’t get trapped in an exceedingly daydream concerning however nice it’d be if your business may run on autopilot.

The truth of that occurring is pretty slim, even for the foremost roaring or establishment.

Apple didn’t simply produce the primary iPhone a decade ago and stop there.

They unbroken innovating and processing to make merchandise shoppers not solely wished, however, didn’t recognize they required.

A lean business is comparable. it’s a continual method. there’s continuously one thing which will be refined, reworked or implemented in a very additional productive manner that may net the greatest attainable results.

Getting stuck on the controller will be a simple entice to fall under, however, it’ll have some serious adverse effects on the semi-permanent success of your business.

According to reports conducted by Small Business Administration(SBA) in 2016.

Statistics show that virtually 80 percent of small business startups barely survive the first year, and only about half of those survive five years or more.

How to start a Profitable Business

The transition from understanding one thing in theory to creating it can be a very difficult one. like the other business strategy, there are advantages to implementing such an approach.

When you just starting out, it’s straightforward to feel compelled to start measuring your business success based on activity — from inventory management to store layout, from employees’ schedules to marketing efforts.

Lean retail isn’t imagined to be an extra burden to associate already busy schedule. It’s a way of getting more out of your time by avoiding wasted effort.

Choose the areas of your business (marketing, sales, inventory, finances) that you believe could most benefit and start there. As a rule of thumb, two trials a week is plenty to get you started.

When doubtful, simplify. creating tiny changes will add up to an enormous distinction in your business.

Rather than remodeling the total layout of your store, think about a number of ways you can change some key components that your customers see as they walk through the doors.

Learning the art of running a profitable business is an ever-evolving process because there’ll invariably be obstacles or bumps in the road that are beyond your control,

Thus you may get to adapt and regulate consequently. The trick is to start out slow and keep it easy.

By doing this, you’ll learn what works for your business and the how those small steps will cause monumental profit.

Thank you for reading. Kindly share it with your friends and leave a comment below.

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About Ini Patrick

Hello, I'm Ini Patrick, a Serial Entrepreneur, Business analyst, and Online Business Strategist. Am committed to helping entrepreneurs grow their business by sharing hybrid information and ideas that teaches strategies and systems to help start and grow any business.

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