Money really does grow on trees…but only if you give the tree some TLC. Professional services firms are no different. With some nurturing and a lot of elbow grease, your business can become the source for an abundance of money.
Here are 5 tips to water your own tree and make your professional services firm more profitable.
Train Your Employees
Imagine your employees in the future completing a $10,000 project in 20 hours, when today it takes them 40 hours to complete. You just doubled your capacity! With the 20 extra hours this employee now has available, you can complete another $10,000 project. You’ve just doubled your revenue from $10,000 to $20,000 by having your employee work the same 40 hours. Investing in your employees’ training and professional growth to help them become twice as efficient will put more money in everybody’s pockets.
Stick to What You’re Good At
If you can make $500 an hour by prospecting new clients, then why are you sitting at your desk scrolling through e-mails? Clients pay you big money for your professional expertise. You should spend most of your time dispensing this expertise and developing new business. Anything else that needs to be done to keep your doors open can be done by someone else for far less money.
Negotiate with Vendors and Suppliers
Many vendors and suppliers are happy to work with loyal customers. Take advantage of credit terms by postponing payments as long as your terms will allow. If you’ve been a long-time customer, ask the vendor for a loyalty discount. Most importantly, always keep an open channel of communication. Working with vendors and suppliers has the same objective as working with clients – establishing a win-win business relationship based on trust.
Get Better Clients!
The best way to quickly boost your firm’s profits is by identifying your best clients, then going after more of them! A-List clients appreciate the value your firm provides their business. They don’t hassle over the price. They’re the clients who are most likely to say “Wow! Your fee is a bargain. You just saved my business a ton of money and I want to work with you more.”
Don’t Skimp on Software
Do you know who your most profitable client is? Do you know what your most profitable service is? You can’t manage what you don’t measure. You need a software platform that lets you generate useful reports to tell you the answers to these important questions. Time and billing software is also helpful when tracking your revenue and expenses. Analyzing how your employees spend their time at work can possibly uncover a client you’re spending too much time on compared to the fees you’re receiving. You can then make the decision to either raise the fee or fire the client!