Increasing Business Efficiency in An Economic Downturn
30 Jun 2021
According to the latest World Bank annual ratings, Nigeria is currently ranked 131 among 190 economies in the ease of doing business. Although Nigeria's ranking improved to 131 in 2019 from 146 in 2018, other factors such as the increasing inflation rates, high cost of foreign exchange and bottlenecks in getting direct foreign investment are enough to send anyone out of business.
Despite the numerous pitfalls in running a business in Nigeria, we thought to share some helpful information that could boost your business efficiency and save you more funds for increased business operations and cash flow without spending more than you are already doing.
1. Cut down on unnecessary waste
The first point of call is to address unnecessary leakages in your business operations, making you lose money no matter how little it might appear. Revenue leakages are one of the most common leakages. It has been estimated that about 1-5% of earnings is lost by most businesses before they realise them. While the percentage might appear little, it can go a long way in affecting the bottom line of a business. When extra measures are put in place to scrutinise and critically analyse processes, such wastages can be prevented.
2. Grow your Profit Margin
Profit margin is one of the most commonly used parameters to determine the degree to which business activity is making money. Profit margin is the gross profit that you make from the sale of each product or service. By continually seeking ways to raise the price or lower the cost of your product or service, you can increase profits per sale without decreasing the quality. One way to achieve this is by enhancing your brand and the perceived value of your product or service.
3. Embracing technology for better performance
Different technological solutions can significantly boost the productivity in your business, and it could range from simple-tech like using VoIP (Voice over Internet Protocol) or internet calls to replace mobile calls to high-tech like introducing cloud technologies to reduce capital expenditure and automating business processes. Fuse ERP is one great tool that can support all your business operations.
4. Turn your prospects into customers
Increasing the number of prospects your business can convert to customers can significantly impact your business. If your conversion rate is one in every ten prospects, then an increase to two customers in every ten prospects can double your revenue. A customer’s buying decision takes place in seconds, that you need to be highly convincing for them to path with their money. Sharing your business testimonial on social media can go a long way in getting you more paying customers. You could also offer a discount to those prospects who are sceptical about buying your product because they do not have a first-hand feel of the product. This way, you have new customers willing to pay more when they get the best experience from using your product or services.
You do not necessarily have to spend so much to save costs and increase your business turnover. Let us know what step you are implementing on your business immediately.