Owning a business is not for the faint of heart. When you own your own business you must constantly be looking at your bottom line. It can at times be a financial balancing act between profit and loss. All businesses from home security companies to web design companies and even places like law firms have to stay profitable to stay operational. Most businesses don’t just want to survive however, they want to thrive. How can any business, regardless of its sector, increase profitability? Like many things in life, it takes hard work; these 13 tips can help.
1. Raise Prices
Raising the cost at which you sell your product is the most obvious way to increase your profits. As a business owner who is trying to stay competitive with their price point, you may be hesitant to do this. It doesn’t have to be a significant increase to make a difference. If you raise prices by around three percent it won’t raise the price too much, which allows you to both increase your profitability and stay competitive.
2. Decrease Costs
Research supply chains in your market area. Make sure you are receiving the highest quality goods at the lowest possible cost. Stay abreast of the changes that may happen in the supply arena in your market area, that way you can always renegotiate the deals you have with your own suppliers. If possible decrease your supply cost. Keeping costs down is just as important as keeping prices up.
3. Cut the Deadweight
It’s important to make sure that every part of your business is functioning optimally. If you have staff that’s underperforming, milking the clock, or otherwise being underproductive, set a limit of time in which they have to turn their performance around. If they fail to perform properly within their given time terminate them. Employing people who aren’t embracing your company vision, and working hard at achieving company goals are costing you money.
4. Increase Leads
All businesses need to lead generate in order to be profitable. If you’ve ever been in real estate, owned a law firm, or done any type of direct sales you know lead generation is your business’ lifeblood. Increasing your leads will generate more customers and ultimately increase your profit margins. The best lead generators have a plan, and a solid network to help implement their plan. In today’s market networking via social sites like Linkedin, Facebook, Twitter, Instagram, GooglePlus, and similar sites can help get your business in front of more eyes. Optimize your use of these sites, as they each have their own ways to promote ads internally, which ushers in more leads for your business.
5. Improve Your Salesmanship
Make sure you are comfortable pitching your business to people. If you don’t have the strongest sales personality it may behoove you to go to a sales seminar. Make sure your sales team is comfortable in their roles. It’s been estimated that a well-informed sales team can increase sales by 46% or more. Equip yourself, and equip your people to excel in their careers.
6. Presentation is Key
Make sure that you are presenting the strongest portion of your business as the focal selling point. For instance, if you are one of the many home security companies in the area, but you are the only one offering live monitoring services, let that be your selling point. It’s likely that your customer’s already associate you with something, find out what that is and capitalize on it. Make that the focus of all your presentations, and allow it to draw in new customers.
7. Be a Cut Above
You may do something that someone else does in your area. It’s likely that your business is not the only one of its kind. There is likely something you do that is better than your competition. Make sure that you point out your own value. Holding yourself and your business to a higher standard than your competitors will lead to repeat business every time.
8. Offer the Upsell
Offer special deals and promotions to entice your customers to buy more merchandise. Every time a customer reaches a point of sale they should be offered an upsell. Upselling is for any customer service field. Even a law firm can offer additional services for a lesser fee. More services rendered equals more money for your business,
9. Focus on Repeat Business
Run sales and deals on a periodic schedule to draw your customers back sooner rather than later. The more frequently your customers return the more money they will spend with you. This starts by keeping your name in the forefront of their mind. Make sure you have a solid marketing plan in place for this. Remember that it only takes a five percent increase in repeat business to increase your profits by up to 75%.
10. Customer Follow-up
Making sure that you retain the customers you worked so hard to acquire is a big part of keeping your business profitable. To do this there are a number of follow up platforms that you can use to make sure your customers are still happy with your services. The number one reason customers leave a business is dissatisfaction, so making sure your customers are satisfied is the best way to retain them.
11. Acquire Funds More Quickly
By processing payments daily instead of once or twice a week, you will maintain a fuller bottom line. It will also help with customer retention, as many people rely on their online banking platforms to keep their balances. If your business processes payments quickly they don’t have to keep a mental or physical record of the amount they spent with you as it will draft from their accounts immediately.
12. Send Debits Slower
If you have to process refunds or other monies that will leave your account, process them as slow as possible. Keeping monies in your business account gives it a “healthier” look to possible investors, partners, and bankers. This “healthy” bank status could give your business the edge it needs to acquire a loan or gain an investor in the future.
13. Create No-Cost/ Low-Cost Marketing Plan
Despite the saying that nothing in life is free, there are some things you can do, at no cost to your business, to promote it. Social media is a great example of this. While there is a paid option to promote your business via social media, you don’t have to. Organic shares and likes are all drawing people toward your business. There are other tools at your disposal, so pick a few, and get started today. Inaction is the only thing that can stifle your business momentum.
No matter your business arena, it’s important to have a solid business plan in order to succeed. The main thing to remember is to stay adaptable. Most plans need a certain degree of adaptability, but it’s important to rethink it, and never give up. Perhaps after you implement these 13 tips, you’ll see your biggest profit yet.