5 Ways to Increase Profits For Your Small Business
BY: MATT SHEALY ON SATURDAY, APRIL 06, 2019
Small business owners of all types can benefit from focusing on increasing profit. However, to “focus” on profit is to do more than just say what you are going to do. You must have a specific strategy in place with steps to make it happen. Take a look at these 6 key ways small business owners can reduce costs, boost profits and increase their bottom line.
1. Get More Out Of Current Clients
Rather than constantly searching for new clients, there may be ways to get additional revenue out of existing clients. One way to get more revenue out of current clients is to consider cross-selling. Cross-selling is when you offer new products or services that complement the items or services you already sell.
You should also consider relationship-based sales models that encourage customer retention. Offering monthly service plans, or a packages can lead to better client relationships and longer more lucrative projects together.
2. Reduce Operational Expenses
Another way to reduce costs is to cut back on administrative and operational expenses. Consider if there are some routine duties that you may be able to eliminate or automate. Additionally, finding ways to outsource tasks may save money. Look into sites like Fiverr and UpWork to find skilled professionals that can work part-time, saving you the cost of a full-time employee. Evaluate where your dollars are going so you can pinpoint any spending that isn’t necessary to eliminate waste wherever you can.
Regularly compare your actual expenses to your forecasted expenses. If your actual expenses are regularly missing the forecast, it might be time to do a re-org and change how tasks are completed. Additionally, diving into the actual expenses and revenue may help you identify ways to grow profits.
Finally, investing in your team may actually help reduce costs. By giving your team educational opportunities you will reduce turn-over which will reduce recruiting and onboarding expenses. Additionally, if workers can pick up more skills they may be able to complete more tasks and be repurposed.
3. Try Free Marketing
Marketing doesn’t always have to be expensive. Give your small business an instant presence through social marketing on Facebook, LinkedIn, YouTube and Twitter. It’s never too late to evaluate your social media presence. Particularly as a smaller business, social media is one of the best ways to get a lot of bang for your buck. Using a step-by-step plan, you can create a valuable social media strategy that supports your business goals.
When running an online campaign, it’s vital to create the right type of content. According to Cisco, visual content will account for 82 percent of Internet consumer traffic by 2021. Ensuring that your marketing strategies involves live and recorded videos is an excellent way to take advantage of changes in the digital marketing landscape.
4. Elevate Your Offerings
Another way to increase profits is to simply charge more for your services. Obtaining certifications, accreditations and licenses for you and your employees will set you apart from the competition and allow you to charge more.
Additionally, small businesses can use their website, business blog and social media to showcase great services. Customer reviews and testimonies will improve your reputation and build client trust. Getting more prestigious clients will also allow you to charge more.
5. Ask For Referrals
Some of your current clients might be your best salespeople. Don’t be shy and ask happy customers to refer friends or colleagues. An even better strategy might be to set up a referral program. The best referral programs reward people who bring you paying customers. Referral programs can lower the cost to acquire new customers and continue to expand your network.
6. Maximize Your Cash Flow
A great way to achieve steady cash flow is to offer various payment plans. Rather than get the cash only once when the contract is signed or completed, offering an ongoing payment plan can spread out payments for the client and allow a business owner more steady cash on hand. Additionally, offering various payment plans can also include moving to longer term agreements like retainers where you are paid regularly for your services.
Every small business wants to increase profit, but making it a reality takes some perseverance. If you want to boost your bottom line, examine different parts of your business and determine how you can cut back without sacrificing customer satisfaction.