5 Tips to Increase Business Profits
- October 1, 2017
- Posted by: Quarles Business and Financial Strategists
- Category: Business Advice
Strategies to Increase Profit in Your Business
When you’re running a business, there is a wide range of challenges you will inevitably face. One such challenge is trying to successfully increase your profit margin. Sometimes it seems that no matter what you do, you never really see any growth here.
We all have seen the presentations telling you how simple it is to increase your profit margin, but seeing genuine profit improvement cannot be attained as easily as it is suggested. Instead, it will take multiple changes throughout various areas of your business.
So, how do you increase operating profits?
Reduce Small Business Cost
More often than not the easiest and simplest way to increase your profit is to reduce your operating costs.
Simply put: If you save money in the costs of running your business, you are immediately going to see an increase in profit.
Look closely at your operating costs, and you will be surprised how easy it is to reduce the cost of doing business.
- Reduce your inventory: Practice good stock control. The less excess stock you have, the less you will be out of pocket.
- Reduce supplier costs: Don’t be afraid to ask for discounts from your suppliers. They are a business too and want to retain you as a customer.
- Reduce waste: Ensure correct training for your staff to reduce costly errors.
The Importance Of Customer Service
What change can you make that will cost you next to nothing but will also guarantee an increase in revenue? Your customer service.
No matter how great you believe your customer service is, I am willing to bet it can still be improved. Try taking a step back and looking at the business as a potential customer.
- Would you be happy with the product and service offered by your business?
- Would it motivate you to be a return customer?
- Would you recommend the product or service to your friends or family?
If you do this, you will no doubt find ways to increase your businesses sales.
Sell Value For Money Not Price
When looking to increase your profit margin, it is very tempting to jump straight to discounting your prices to encourage new customers. But sometimes this isn’t the best solution.
Instead, review your pricing and look at the market and your competitors. Are your prices in line with your competitors? A lot of people tend to try and charge below the market average as an initial business model and while some customers are price motivated, not all are.
The solution might be instead to increase your pricing to be in line with the market and compete on providing the best value for money, rather than the cheapest product.
A lot of people are happy to pay for a slightly more expensive product if they genuinely believe in the value for money they are getting. Educate your potential customers on what makes your product unique and better than your competitors. They will be more than willing to pay good money for a superior product or service.
How to Sell Value vs. Price
Your Product Is The Key To your Success
Make some simple changes relating to your products and services and you will see a marked improvement in your profits.
- Promote products and services with high-profit
- Remove products and services that are not popular with your client base.
- Develop new products and services based on genuine market research.
- Provide specialised products and services that are not readily available in the market.
Build Brand Awareness Without Big Budgets
We all know that the most successful way to get new customers is through word of mouth. People trust the reviews and experiences of those close to them, so they are more likely to make a decision on which product to purchase based on a family or friend’s recommendation.
Instead of sinking a lot of money into expensive marketing campaigns such as advertising placements on TV, print, billboards or radio, consider looking towards low-cost marketing techniques such as social media and digital marketing.
How to Increase Your Brand Awareness
Your business is not a stagnant object, it needs to evolve and adapt to your changing market to ensure financial success. By implementing some of these financial strategies in your business, you will be sure to see an increase in profit.
Each business is unique and faces unique challenges in increasing profits. Give us a call at Quarles and speak with a trusted expert about how best to increase the profit margin for your business.