Everyone wants to be more profitable. After all, profit is how we keep score in business. It’s not about what you make – it is all about what you keep. Sometimes the simplest ideas can help you increase your profits.
Profit is how we keep score in business. Just because you can pencil profit into the financial section of your business plan doesn’t mean it automatically will happen. As an entrepreneur, you have to commit fully to “minding your own business” to generate the profits that you seek. In articles by business entrepreneurs Melinda Emerson and John Rampton, here are several strategies to follow as you look to make your business more profitable.
While it may not be the most original way to increase your business profits, product markups can be quite advantageous. Buying low and selling high is obviously the best model for your business profit-wise, and if you can markup products even more and keep a steady stream of business, you may tap into an undiscovered profit center.
If you have an unmanageable abundance of clients, don’t stop taking on new ones; instead, partner with another business and client share in exchange for a cut of the profits. A marketer, for example, may charge a client 50, 000 shillings for a website. If the marketer doesn’t have the time to develop that website on his own, he may pay a third party 30,000 shillings to do it, keeping 20,000 shillings for himself.
Pro tip: make sure that you partner up with only the best companies out there.
If you keep a website that receives a lot of traffic, partnering with a similar company–although not a competitor–can be advantageous. For example, if you own a business that specializes in athletic shoes, you could profit by having advertisements on your website for other athletic gear. Thomas Jefferson supposedly said, “The man who stops advertising to save money is like the man who stops the clock to save time.”
If you’re good at marketing online, you’ll learn quickly that paying for a customer is crucial to scaling your business online.
If you’re an expert in your field, don’t limit yourself to just practicing your expertise; instead, become a consultant who teaches others how to do what you do, or offers seminars, webinars, and speeches regarding your forte. Charging for consultations and seminars is an excellent way to increase your business profits. So you know what to charge, check around and see what other consultants who specialize in similar services are charging. If you have more experience or education than these other consultants, then you have a good case for charging more.
If you’re a business owner that’s succeeding in your endeavors but want to optimize your profits, consider adding a new product line or service to your company to create an entirely new profit center. Make sure the product is in-line with your current offering, market and advertise well, and develop a plan of action for implementation.
Generating revenue from clients that already know, like, and trust your brand is much more cost-effective than spending money acquiring new customers. If you provide clients with a superior experience, they’ll want to do business with you in the future and will likely send referrals your way. Almost any business can implement a customer referral program by offering current customers products or services for referring new customers or clients.
Referrals are 100 percent how many entrepreneurs have been growing online businesses. These are by far the best ways to exponentially grow your business year over year.
Free or Discounted Offers
Depending upon your business type, you may be able to entice customers or clients with freebies in order to make a sale. For example, attorneys often offer initial free case consultations as a way to hook a client. Or, an auto repair shop may offer a free oil change, but then offer a service to the customer while changing the oil. You can also offer discounted services or products.
Depending upon who you’re marketing to, you may have a profit center hidden within your clientele–by seeking more affluent clients, you may be able to increase your business’s annual profits dramatically with hardly any work. Just be sure to approach these potential clients the right way–don’t appear too needy or pushy, know your stuff, and reach these potential clients through networking.
Customer acquisition is an expense, but one that yields some sort of business income. By acquiring customers more creatively–and more efficiently–you can reduce your acquisition costs and therefore improve your ROI (return on investment), benefiting from a previously unexploited profit center. Improving your advertising and marketing is key for improved customer gain and retention.
Learning New Skills
Consider learning a new skill or adding to the knowledge that you already have. For instance, you could pick up some new IT skills like application virtualization with an online course. You could also improve your public speaking and leadership skills by joining a club that trains on such.