Every business – no matter its size or industry – shares a common goal: to increase business profits. A profitable business is one that can continue growing, innovating and serving its customers.
If your profits are shrinking or you’re struggling to turn a profit with a new business, these six strategies can help.
Modify the Operational Procedures
If your profits are dwindling, then your current operational procedures aren’t working for your business. Making changes to your procedures can help boost profits and give you an opportunity to eventually invest business profits.
When changing operational procedures, the goal should be to:
· Increase sales
· Reduce expenses
How can this be achieved?
To increase sales, you can:
· Cross-sell (offering items or services that complement your offerings)
· Offer discounts or special promotions for new customers
· Offer monthly, quarterly or yearly service plans
· Offer bundled services at a lower price
To reduce expenses, you can:
· Outsource routine tasks to free up time for core tasks
· Eliminate tasks that aren’t necessary and eating into your profits
· Reduce your inventory volume and buy stock as you go
Modifying your operational procedures can go a long way to boosting profits for your business, and these are changes that you can control.
Keep in Touch and Stay Visible
To attract more clients or customers, it’s important to stay relevant, visible and connected to your audience.
There are several ways to achieve these goals:
· Ensure your licenses, accreditations and certifications (if applicable) are up to date or pursue more advanced certifications to set your business apart from the competition.
· Be active on social media and engage with your followers.
· Post regularly on your blog to educate your visitors and keep them informed about advancements in your industry or business.
Putting your brand out there in front of the right people will help attract more targeted leads that can easily convert to new customers.
Increase Your Cash Flow
Business profits and losses are important, but cash flow is king. When a business has a healthy cash flow, it can confidently cover its operating expenses and invest surplus cash into growing the business.
How can you maximize your cash flow?
· Offer subscriptions
· Provide incentives for early payments from clients and customers
· Negotiate longer payment periods with suppliers and vendors
· Send out invoices right away
Make sure that you're using a tool like Cash Flow Frog to create cash flow forecasts and manage your cash flow. Tools will save you time, reduce errors and help you prevent cash shortfalls that can put a financial strain on your business.
Reduce Management Expenses
There are so many factors that affect a business’s profitability, from the efficiency of its employees to the effectiveness of its lead generation and collection of accounts receivable.
With so many metrics to consider, it’s important to automate as many management and administrative tasks as possible. Doing so will not only help you make smarter business decisions, but it will also help reduce expenses.
Boost Your Marketing
Increasing sales is one of the most effective ways to boost your profits. Of course, reducing expenses will immediately free up cash, but if you’re not increasing sales, these gains will be short-lived.
Boosting your marketing efforts can help increase sales and expand your loyal customer base. Make sure that you’re taking advantage of social media platforms like Facebook, Twitter, Instagram and YouTube to network, expand your reach and engage with your audience.
Offering demos, tutorials, webinars and other promotions can help you generate buzz around your brand and get people talking about your offerings.
Make sure that you’re measuring your progress to see which marketing strategies are most cost-effective. There are many online tools and templates like flash report template, that you can use to check your small business profit statistics and the effects of your marketing efforts.
Everyone Should Be a Salesperson
Every employee can help spread your brand's message and at least drum up interest in your offerings. Encourage employees to pitch in to help with sales, networking and marketing. If your team is invested in helping boost profits, you will increase sales and your customer base without adding to your expenses.
Every business has the goal of boosting profits, and there are many ways to achieve this goal. Increasing sales and cutting back on expenses will help generate healthy cash flow so that you can reinvest in your business.