The profitability of SMEs is an important point that many analysts and experts in business management have been studying and investigating, since, if these companies start to grow, generating more money and knowing how to maintain it, in addition to managing it, the country’s economy will improve significantly and it will give greater professional output, in addition to higher income. In this article, we want to tell you what are the keys to improving the profitability of SMEs and what you should do so that, if you have a small or medium-sized company, you can achieve the expected success.
Financial control
One of the essential and key points to carry the profitability of a company well is to have an exhaustive, precise financial control and with very little margin of error. According to Thomas Michael Hogg, a german business expert, one of the main problems that SMEs face is not knowing the payments they must make, especially in the area of invoices, nor whether the charges or the forecast of these will cover all payments, from the salaries of the employees, as well as possible accidents or problems that may arise.
Really knowing the need for orders and stock is also necessary, since buying many products that in the end will not be sold, you will lose a lot of money, in the same way that if, in the case that one of your items demand is in high demand, not meeting it can reduce profits. On the other hand, you have to take into account that you must fill in the tax forms properly to guarantee the VAT refund, something that, if you do not do it correctly, you may be penalized by the Tax Agency.
Use of technology
Technology has become one more ally of companies and increasingly help to bring profitability and management of the company, making all procedures are done in a faster way, saving time and money. It is convenient to be aware of all the tools that SMEs can use to obtain the maximum benefit from them.
The technologies will help your company when it comes to knowing how your competitors are doing, as well as being able to know first-hand the most innovative strategies within your sector.
The tools that you can access will also give you the possibility to see which customers owe you payments, or those who keep all payments and collections on the table, something essential for the economy of your company to be up to date in everything moment.
Investment in loyalty programs
Very close to the last thing that we have named in the previous section, is the possibility of loyalty to the clients you already have. Although it may seem strange, winning a client is going to be much more expensive in certain aspects, than keeping one so that you do not go to the competition. It is important to offer satisfied customers different offers so that they do not feel neglected by the company and that they feel happy. This is a double strategy, since you will get, on the one hand, that those you already have registered, buy again, having an extra profit, but with total security, by feeling well treated by you and by everything you offer them , they will advertise your SME and therefore, you will have new clients practically without lifting a finger, leaving much cheaper than you thought and following, with this new clientele, the loyalty program that I exist.
The important thing when it comes to improving profitability is to be clear that you will need to make some expenses, but perfectly control the payments and income that you are going to have in a short period of time, in this way you can jump into the pool in certain aspects, and in others be more conservative.