© Copyright Acquisition International 2024 - All Rights Reserved.

Article Image - Building Profitability: 5 Best Practices Businesses Need to Get Right to Succeed
Posted 23rd September 2024

Building Profitability: 5 Best Practices Businesses Need to Get Right to Succeed

Adopting strong practices is essential to thrive in business, and companies need to put a number of strategies in place that drive their goals and generate financial success to achieve the ultimate goal of profitability. This includes re-evaluating and refining business processes to operate effectively and stay competitive.

Mouse Scroll AnimationScroll to keep reading

Let us help promote your business to a wider following.

Building Profitability: 5 Best Practices Businesses Need to Get Right to Succeed
Business profit

By Ian Nicholls is CEO of Explic8

Adopting strong practices is essential to thrive in business, and companies need to put a number of strategies in place that drive their goals and generate financial success to achieve the ultimate goal of profitability. This includes re-evaluating and refining business processes to operate effectively and stay competitive.

Here are 5 best practices every business needs to master in order to succeed.

1. Optimising internal processes

    Optimising internal processes is a key practice for business improvement and increased profitability – it can be the difference between success and stagnation.

    While various daily actions can be employed to significantly improve operations, it all starts with refining the decision-making process. Optimising decision-making ensures resources are allocated efficiently, risks are mitigated, and opportunities are capitalised on. This involves leveraging data, aligning decisions with business objectives, and empowering teams to make informed choices.

    Streamlining workflows, automating repetitive tasks, and minimising bottlenecks are also crucial. In fact, companies that automate processes experience a 30 per cent reduction in operational costs, according to McKinsey.

    By building a culture of continuous improvement and regularly reviewing internal processes, businesses can enhance productivity, reduce costs, and maintain a competitive edge.

    2. Prioritising customer retention

    Customer retention is critical to improving profitability. Repeat customers not only provide a steady revenue stream but they are also up to five times cheaper to retain than acquiring new ones[1].

    Building customer loyalty starts with emphasising shared values. A business must clearly define its core values and ensure they resonate with its customers to encourage repeat business, and actively seeking and engaging with feedback is essential.

    By addressing customer feedback, companies can identify pain points, resolve issues and enhance the overall experience, leading to improved retention. Satisfied customers are more likely to refer a business to others, further driving growth and profitability.

    3. Effective leadership and management

    Effective leadership plays a vital role in driving business efficiency and long-term success, and investing in management training is one of the most powerful ways to cultivate these leadership qualities within an organisation.

    Training helps leaders develop essential skills like strategic thinking, communication, and emotional intelligence, all of which are crucial for navigating and resolving complex business issues. Well-trained leaders also make more informed decisions, helping the business adapt to challenges and opportunities quickly.

    Management training enhances leaders’ ability to motivate, inspire, and engage their employees, building a higher performing team. With effective leadership in place, teams tend to be more productive, innovative, and resilient.

    Ultimately, investing in leadership training not only improves day-to-day operations but also strengthens the long-term prospects of the business.

    4. Embracing innovation and adaptation

    When implemented well, innovation and adaptability can set a business apart from its competitors and increase profitability.

    According to a BCG study, companies that prioritise innovation see 1.8 times higher revenue growth than those who don’t. Meanwhile, creative strategies and fresh ideas are key drivers of business growth, opening the door to new opportunities, such as diversifying revenue streams or entering untapped markets.  

    Adaption can take many forms, from minor internal improvements to larger strategic shifts, all of which can enhance productivity and operational efficiency. Incremental innovation –  making small, ongoing improvements to existing processes or services – can significantly and positively impact a business over time.

    While innovation doesn’t always result in a new product or service, it often enhances the overall approach to business development, contributing to long-term profitability.

    5. Financial planning

    Another crucial business practice for improving profitability is dedicating time to thorough financial planning, with research by the Association of Financial Professionals showing companies with strong financial planning are 30 per cent more likely to reach their growth targets.

    Optimising pricing strategies is another way of staying competitive while maintaining profitability. Financial planning allows companies to pinpoint top-performing products or services, enabling them to focus resources on where they generate the most value. This approach maximises revenue streams and highlights areas where operating expenses can be reduced, leading to more sustainable growth.

    Final thoughts

    Profitability is a crucial factor for business success, and the decisions and day-to-day operations within a company can directly impact its financial outcomes.

    Maximising profits isn’t one-off task but an ongoing process. By applying these 5 best practices and continuously seeking ways to improve, businesses can ensure their every decision supports their overall goals and contributes to success and growth for the long term.


    [1] Harvard Business Review

    Categories: News, Strategy


    You Might Also Like
    Read Full PostRead - Eye Icon
    A Handy Guide to Choosing the Ideal Personal Injury Lawyer
    News
    26/10/2023A Handy Guide to Choosing the Ideal Personal Injury Lawyer

    You may walk around thinking that you may never need a lawyer, as you pride yourself on being the safest person on planet Earth. You may be someone who’s following all the rules and ensuring your actions don’t cause harm to you or those around you. Unfortu

    Read Full PostRead - Eye Icon
    Understanding VAT Assessments: Key Advice for Businesses
    Finance
    08/10/2024Understanding VAT Assessments: Key Advice for Businesses

    Declaring and paying VAT is one of the many routine legal responsibilities resting on the shoulders of businesses.

    Read Full PostRead - Eye Icon
    7 Business Benefits of Hiring Managed IT Services
    News
    02/11/20217 Business Benefits of Hiring Managed IT Services

    Besides accounting, one of the most outsourced jobs is managed information technology (IT) services. And for a good reason. Hiring managed IT services involves hiring third-party specialists to take charge of a business’ needs. As such, entities can focus on

    Read Full PostRead - Eye Icon
    8K Miles Software Acquire MindPrint on USD400k
    M&A
    Read Full PostRead - Eye Icon
    Experts in the IP Field
    Strategy
    01/11/2016Experts in the IP Field

    Am Badar & Partners is one of the leading intellectual property (IP) firms in Indonesia.

    Read Full PostRead - Eye Icon
    AI at Work: It’s Here and It’s Working, Whether You Know It or Not
    Innovation
    01/11/2023AI at Work: It’s Here and It’s Working, Whether You Know It or Not

    Don’t call it a takeover, AI’s been here for years. A new global study from HR, payroll, and workforce management software provider UKG reveals that many people use AI daily both at home and at work, and it’s already making millions of jobs easier — em

    Read Full PostRead - Eye Icon
    Should You Fund Your Startup With Personal Credit Cards? Pros, Cons & Key Considerations
    News
    17/08/2022Should You Fund Your Startup With Personal Credit Cards? Pros, Cons & Key Considerations

    Getting a new business off the ground when you don’t have the necessary capital saved up can be quite tricky. Risk capital sources such as angel investors, and VCs give a hard pass to the large majority of small businesses, unless they have breakthrough idea

    Read Full PostRead - Eye Icon
    The Importance of Branding in Building a Strong Business Identity
    News
    16/08/2023The Importance of Branding in Building a Strong Business Identity

    Every day, we come across a number of new brands, whether online or in the physical realm.  While this vast variety benefits consumers, granting them numerous choices, it presents a challenge for businesses striving to distinguish themselves in the bustling s

    Read Full PostRead - Eye Icon
    How much are companies spending on employee breaks?
    Leadership
    12/07/2019How much are companies spending on employee breaks?

    Keeping a close eye on your companies’ finances is an important role – but do you know how much your employees are costing you when there taking a break? Inn Supplies, leading supplier of paper coffee cups, looks in detail at the costs:



    Our Trusted Brands

    Acquisition International is a flagship brand of AI Global Media. AI Global Media is a B2B enterprise and are committed to creating engaging content allowing businesses to market their services to a larger global audience. We have 14 unique brands, each of which serves a specific industry or region. Each brand covers the latest news in its sector and publishes a digital magazine and newsletter which is read by a global audience.

    Arrow