The main reason why we engage in business, is to benefit from its profit. As young people, we have big dreams of employing ourselves, and having money to acquire certain assets and live comfortably. But in most cases that is not the case as our businesses tend to die due to making a loss. The following tips will help you to up your profits.
1. Increase Customer Referrals
The customers who come to you as the result of referrals from your satisfied customers. Developing one or more proven referral systems for your business can have an inordinate impact on your sales and your business will make more money.
2. Eliminate Costly Services And Activities
Many companies get into a routine of offering expensive services to their customers that they could easily discontinue with no loss of customer satisfaction. Look at the little services that you offer to your customers. Is there anything that you could reduce or discontinue altogether?
3. Raise Your Prices
In many situations, you can raise your prices by 5 or 10 percent without experiencing any market resistance. If your products and services are of good quality and your people are friendly and helpful, a small increase in your overall prices will not drive your customers away.
4. Increase Number Of Transactions
The number of individual sales that you make to each customer that you acquire. By increasing the frequency of purchase by ten percent, you increase your sales and increase profits by the same percentage.
5. Discount With Purpose, Not From Habit.
If you need to discount to stay alive, by all means do so. But do it strategically by knowing how much more you’ll need to sell at the lower price to make up for the discount. Also, don’t make it too easy for your sales people to automatically discount to make a sale. If you pay your sales people on commission, base it on gross margin, not top-line sales.
6. Think Outside The Box.
Look outside your industry for ideas. We all can learn lessons from how other industries and business models are maneuvering through these times. The New York Times has an excellent online series called, “How I Saved My Company” that features videos of business owners sharing how they got their companies through the recession.
7. Take action.
A very wise person said that hope is not a strategy. Take action when needed. Don’t let problems linger. If you made a buying mistake, don’t hold on to the product. Take the hit and get it out the door so you can generate cash to buy or produce products that will sell.
8. Look Around You.
Find out what the leaders in your industry are doing. As long as they are not direct competitors, most are willing to share ideas. Join a peer group that shares numbers, not just war stories. I know many businesses that are alive and flourishing even in today’s challenging times because of ideas and insights they gained from such groups.
9. Reduce Your Break-Even Point
This is the number of items that you must sell each month to break-even or start making a profit. You use this break-even point to evaluate the potential effectiveness of any advertising or any other expense that you incur to increase sales. Every expense to increase profits must be seen as an investment with an expected rate of return that is greater than the cost
10.Reduce Cost Of Advertising
The amount that you have to pay to acquire each paying customer. You should be continually seeking creative ways to improve your advertising and promotion so that it costs you less to buy each customer. This can impact and increase profits of your business dramatically