How to Improve the Bottom Line of Your Business

Understanding the bottom line of your business is a crucial benchmark to have, allowing you to measure how profitable and stable your business is based on your net profits – whether that’s a positive or negative figure.

A growth chart and a laptop on a table

Knowing what your bottom line is gives you an indication of how well, or not so well, your business is doing. Having a good level of profitability is key to growth and expansion, investing those profits back into the business.

For SMEs, if your bottom line isn’t where you want it to be then you might not know where to start from. So, here are several areas of your business you can review and adjust to potentially get it moving in the right direction.

Things you can do to improve your bottom line

Review all your expenditure

Part of understanding why your bottom line is where it is involves doing a full breakdown of any and all expenditure. Everything from supplies and rent to overhead costs need to be considered so you can see where your money is going.

It doesn’t matter how big or small the cost is, you need to make sure it’s logged within your business accounts. This way you can start thinking about where savings can be made.

Using a calculator and a laptop

Some small costs can’t necessarily be easily cut, such as for PPE like shoe covers or hairnets, and larger costs like rent are essential parts of your monthly outgoings. You can assess where you can make expenditure more effective, potentially by switching suppliers or cutting down on stock levels for certain items.

Focus on your key revenue streams

Your accounts can also show you where your business is most profitable through areas of revenue. Inversely, wasting resources on revenue streams which aren’t adding value to your business doesn’t help your bottom line.

If part of your business is sapping your bottom line, redirecting your focus toward your primary revenue channels can help. Investing more of your resources into these channels could see a significant boost to your revenue by capitalising on the strengths of the business.

Optimise your processes for productivity

Time is a precious thing – it’s what is spent to perform key tasks within your business. Your bottom line could be suffering because ineffective processes are causing more time to be spent on certain tasks, making your overall output less profitable.

Checking facts with a magnifying glass

Take a deeper look at how the processes in your business may have inefficiencies, causing profitability to fall. If you identify any poorly performing areas, try to implement better business processes which can be done quicker without sacrificing on quality.

Streamlining your business processes and ensuring all employees have the right training will generate better outputs. Operations will be more time-efficient, meaning they will contribute better levels of profitability for your business.

There are more actions you can take to improve your bottom line externally, such as considering what marketing activity you can leverage, but the first step should always be to optimise your internal activity if possible.

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