3 Ways To Increase Profits In Your Small Business Today!
Updated: Aug 1
As business owners, we all want to be successful and have our businesses make a profit. Sometimes though making a profit isn’t as easy as you might think. Here are 3 ways that you can increase profits in your small business today!
1. Streamline Your Costs
We have all heard of the traditional wisdom that streamlining costs will make your business more profitable. And guess what? It works! Streamlining costs is one of the quickest ways to make your business instantly more profitable. For example, let’s look at an electronics retail store which buys and sells computers. One way to streamline costs for this business is to look at the relationships the store has with their various suppliers. If they are selling a computer that costs them $1,000 from vendor A and they could get a comparable computer from vendor B for $850; then the store just increased their profits by $150 per sale just by purchasing their inventory from vendor B instead.
Streamlining costs isn’t always about cost reducing steps either. Another way to streamline costs is to make your employees more efficient at their jobs so they can get more work done throughout the day. This might sound counterintuitive but investing in employee training programs or investing in more efficient systems will help increase your profitability in the long run.
2. Increase Your Revenue
A surefire, never fails way to increase profitability is to increase the amount of money flowing into the business. Running marketing campaigns, increasing sales, building websites and landing pages that have a clear call to action are some examples of ways that can help your business increase its revenue. Another great way to increase revenue is to launch a promotion or a subscription offering to potential customers.
For example, a car wash could offer a subscription plan at $20/month for unlimited washes or pay $15 per wash. This may sound like the car wash is going to lose money with the subscription but what they have to measure is how many people actually came back to the car wash during the month. If most of their business was just people coming to get their car washed once and that’s it, then the subscription is a great way to help ensure that those same customers come back the next month and the month after that. A subscription helps to make the customer relationship “stickier” by providing customers with a reason to make that car wash the only car wash that they go to. Increasing revenue in the business can definitely help increase profits.
3. Have A Clear Message
Marketing is all about getting your message out to the world and increasing the number of leads coming into your business. Having a clear and consistent message is extremely important, especially in this age of digital advertising. At first glance, you might think that this doesn’t relate to increasing my profits at all. However if we focus on the core principle of marketing which is to generate more leads for your business, then it makes sense to include marketing as a way to increase profitability.
Having more leads is the first step to gaining more customers and then increasing revenue. Once leads start coming in, having a well defined sales process is important to converting leads into customers. In turn having more customers leads to increased revenue which translates to increased profits. In my opinion, having a clear and consistent message is one of the best ways to have long term profitability.
I would say that streamlining costs is probably going to be the easiest way to increase profits immediately. But I would also say that having a clear marketing message is the best way to have long term profitability. If your business is a well kept secret, then it’s really hard to find new leads. If your message isn’t consistent across all of your marketing channels, it’s hard to build a solid lead generation system.