You’ve reached your goal of opening your own business. Maybe you even have some regular clients and things are going well. But sooner or later, every business owner starts wondering how to increase profits.
There are absolutely things you can do to increase profits, but don’t expect any easy answers. Your course of action is dependent on the type of business you’re running, staffing costs, and overhead or supply issues you could run into. And be prepared to do some research into your competitors and standard market rates. All that said, we’ve put together our list of tips to get you further in the black. Patience is a virtue in this case, but we’ve included a mix of short and long-term approaches to give you ideas for today and well into the future.
Increase prices, but provide more value
You don’t have to be the cheapest place in town for customers to keep coming back. You have to be the best place in town. That means different things to different people, so make sure you listen to your customers. Do they like your personalized customer service? Do they like the atmosphere of your store? Are they impressed with how quickly you provide a quality product? All of the above? Whatever it is, make sure you keep doing it well. You probably won’t be able to sustain business if you give your customers sticker shock, but do your research. If you’re in the ballpark of your competitors but you offer something more, your customers will come back.
Pinch pennies, but don’t be pound foolish
If you found that you had to cut back in your household, you would probably look at your personal budget line by line, and you should do the same with your company. Are you spending a lot on cell phone plans that can be reduced? Are you paying for a trade license for software that only one person uses? Are you paying for traditional IT support when cloud resources would work just as well? Take a hard stance and see if you can live without some of these things for a month or two. You can always add them back in if you need to, but it’s good to know what you can live without.
Be a diamond in the rough
Going back to providing value, think about your marketing strategy and your brand story. What truly sets you apart from your competitors? You need to convey that to the market. This will solidify your position with existing customers and help you reach new ones. Again, do your research. Find out what your clients’ challenges are, be the best in the business at solving those challenges, and figure out how best to tell that story through your marketing and communications materials. And take it from us, email marketing is a great place to start.
Stop talking about yourself, but get your name out there
Once you know what your clients’ challenges are, keep talking about your clients. Everything you do and say about your business should relate to how you’re making your clients’ lives easier and solving their problems. Then, do some outreach. Community events and charity partnerships can elevate your brand, give you networking opportunities and allow you to support a great cause all at once. If you own a pet store, partner with an animal shelter. If you run a design studio, set up a program with a local school to provide art classes to kids. You get the idea.
And this may go without saying, but if you’re a sole proprietor, get out there and network your hands to the bone. Join associations, attend alumni events, and go to every meet-and-greet to which you’re invited. It may seem like a lot of work at first, but it will pay off with leads through your social circle.
Use technology to your advantage and invest where necessary
If you’re a technophobe, you’re not alone. A lot of our clients are nervous about social media and using the latest software, or they just don’t know where to start. If that’s the case, consider hiring someone on a contract basis to run your social media efforts or have a one-time consultation with a tech expert to see where you can benefit. Once a social media expert gets your business up and running with a solid strategy, you may be able to handle it yourself, but starting off with some professional advice can really help to launch your business online. And if you think social media is a waste of time, consider this: social media users have risen by 176 million just since 2015. That’s a lot of potential customers that you’re ignoring. What was once the bastion of bored 12-year-old’s is now an intrinsic part of every major brand on the planet, so don’t get left behind.
In the end, profitability comes down to increasing prices, cutting costs, getting more clients or a combination of those three principles. Knowing who you are and what your company does best will lead you to the right path. With a combination of short and long-term profit strategies, your company can keep growing at a steady pace.