How To Increase Your Margin

Written by Fergus Doyle – The Business Troubleshooter

Talk to any owner of an SME company and you will hear that they have been, and continue to be under extreme price pressure. You’ll hear that “we are on a race to the bottom”. There are three things you can do right now to address this problem:

Follow The Value:
“You get paid for the value you bring to the marketplace”. Taking heed of this one sentence can transform your business if you act on it. Whether we like it or not, our customers only pay for value. The skill needed is to find out what they see as valuable because it is more often than not different to what we see as value. The funny thing is that they want to tell us but we often don’t want to listen, so start listening. Ask them why they do business with you and not your competitor. When they give you this nugget of information you will now have the key to unlocking additional sales, because you can now correctly articulate what is valuable about your product or service.

Dare to Be Different:
Think of brands you know of that stand out in the marketplace, one’s that you think of as different – Virgin, Ralph Lauren, Ferrari. Now think of the products they offer. They don’t strike you as being cheap, you may think they are expensive, but people are buying them. For these and other similar brands they consciously think of being different. You’ll say “that’s not us, we’re too small”. All the above examples started from humble beginnings. It is open to each of us to dare to be different in our marketplace, and if we are different we can charge more and that gives us more margin.

Sweat The Big Stuff!:
What you spend your time on, how much of it is actually productive? If you’re like most of us you spend the most time spinning your wheels on things that are not important. The most productive people only focus on the BIG things. They don’t waste time on small things. Take what ever task list you have and categorise it into BIG tasks and then what’s left is largely unimportant for now. When you address the big stuff the rest will filter to the top your list if it is important enough. If you encourage your employees to do the same the whole organisation will become more productive, increasing efficiency and wasting less, thus increasing margin.

Summary
You don’t have to do much, but you must do something. We are all where we are because of what we done up to now. If you’re not happy where that is then do something different so you end up in a different place.