How to Increase Profits in a Small Business
You don’t need to be a financial wizard to boost your bottom line (profits 😊). Here are some simple tips to help increase your small business profits!
- Trim the Fat, Keep the Muscle
Ehm…. those fancy office snacks are good for team culture (but expire and are thrown out due to low consumption), or that software subscription you swore you’d use (but forgot about for the past three months) …… Do you get the point? That is what we mean by trimming the fat and keeping the muscle. It is time to take a closer look at your expenses and cut the costs that aren’t adding value to your business.
- Charge What You are Worth
Too many small businesses price their products or services like they’re afraid of hurting someone’s feelings. Stop that! It’s time to charge what you’re really worth. If you’ve got a great product, price it confidently. Remember, you’re running a business!
- Up-Sell and Cross-Sell Like a Pro
You know how fast-food places always ask if you’d like to upgrade to a large-size meal for just a dollar more? That’s upselling! If a customer is already buying, it’s easier to convince them to add a little more to their order. Cross-selling on the other hand is bundling products together at a price slightly lower than if the items are individually purchased. Cross-selling related products by offering bundle deals can help increase revenue which may translate to an increase in profits.
- Turn Your Customers into Brand Ambassadors
(whispers in your ear) Your existing customers are your first-hand sales team; we bet you did not know that! Offer loyalty programs, referral discounts, incentives, or promotional merchandise to spread the word. Happy customers are like free marketing you can use to increase revenue.
- Collect Your Revenues as Fast as Possible
Chasing after unpaid invoices is about as fun as watching paint dry, phew! Make it easy for customers to pay you, and don’t be shy about following up. The faster you get paid, the quicker you can reinvest that cash into growing your business. Reinvestment of cash may result in other income that will flow down to increase your business profits. Think of it as the financial equivalent of “time is money.”
- Be Creative
This may sound cliché, but it is game-changing. You don’t have to reinvent the wheel, sometimes, a fresh spin on an old idea is all it takes. Obtain and act on customer feedback, adapt your offerings, and make small tweaks that could lead to big results. Remember, even a little innovation can go a long way.
- Add New Revenue Streams and Create Segments
Think about related, similar, or complementary products you can add to your portfolio. Not going to name names, but a company went from just booking rides for yourself to booking rides for others, in advance, and even booking rides for parcels. Also, the rides are grouped into categories based on the kind of luxury you want, with different prices for the same distance!
Think Big, Act Small, Grow Fast!
Increasing profits in a small business is about making small and smart changes that add up over time. Focus on value, keep your costs in check, and don’t be afraid to charge what you’re worth. Before you know it, your small business will be growing big-time profits without any unicycle tricks involved!
Next Steps…
Having a finance business partner work with you can make the process more seamless. ARAA Solutions is here to step in as your trusted finance business partner. Get in touch with us today to find out how we can collaborate and support your business’s financial goals!