With turbulent Economic headwinds growth comes focus on your top line , focus on your turnover. You don’t want to miss out on growth through potential new customers and markets. The economic picture now looks a bit more uncertain. Many households are struggling with higher monthly expenses, for example due to higher energy and grocery costs. This has a direct effect on their spending pattern, including their online purchases.
But even if your turnover is declining, your bottom line can grow. Time for a critical look inward. Time to focus on your bottom line growth.
What is the difference between top-line growth and bottom-line growth?
Top-line growth refers to the growth of sales. Some examples:
Increase customer base through marketing efforts.
Attract new customers through advertising.
Launch a new product line.
Raise prices.
Acquire another company that increases market share.
Bottom-line growth refers to what is ‘below the line’ of the income statement. Also known as net profit. Some examples:
Save on customer acquisition costs with smarter, more targeted marketing.
Increase efficiency in production or services.
Reduce service provider costs.
Reduce employee wages and benefits.
Offer employees training to improve productivity.
Implement cost-saving measures to reduce overhead costs with digitalization.
Improve collection methods for customers who pay late.
Tightness on the labor market
The 4th point above regarding ‘lowering wages and allowances’ needs explanation in the current labour market conditions. Many companies are namibia email list 137403 contact leads struggling with staff shortages. Fuelled by higher inflation, wages are also rising considerably. There is a tight labour market , employee costs are rising, so there are no savings to be made there now. Where then?
Focus on business negotiation
Negotiating effectively is a way to reduce your get the most out of your investment costs and improve your bottom line in the short term. If you are not currently investing time aob directory and energy in negotiating business products and services, or do not have sufficient knowledge of it, you are probably paying ‘full price’ for it.
Some areas of attention that you can look at critically in order to (re)negotiate:
marketing and sales costs
production costs
costs of service providers
legal costs
working capital financing
commercial mortgage loans
utility costs
refinancing of business loans
This often involves monthly recurring costs where a one-time (re)negotiation ensures that you have lower monthly costs for the coming years. Do the math.
Encourage everyone in the organization to use their business acumen to come up with cost-saving measures. If you don’t have any internal knowledge of a specific topic, ask a specialist. They will probably pay for themselves quickly. It can have a major impact on the bottom line.
The triple bottom line
Historically, businesses have pursued financial profit as their only goal. But in 1994, author and entrepreneur John Elkington introduced the concept of the triple bottom line (TBL) with the goal of transforming the traditional, finance-centric business model into a comprehensive approach that measures both impact and success: Profit, People, Planet.
As a result of TBL theory and practice, companies have come to realize that there is a connection between social well-being, environmental stewardship, and an organization’s financial success and resilience. To gain an accurate picture of their operations.