It is probably the concern of every business owner – “How do I increase my profits?”
The business has been set up, the client base has been established, and your products have gained a good following – so what else must you do to increase cash flow? How do you substantially increase profit?
Here are the top 5 tips that might help answer your questions.
Increase unit prices by no more than 3%. Notice that there is a ceiling to the suggested price increase. Why, because no one likes to pay 25% more for something they’ve been buying for years! Don’t turn off your existing customers by too-sudden and heart-attack-worthy price increases. Do it gradually, and explain to them why the increase was necessary. Of course, you should never say “so that I will earn more” – you’ll be shooting yourself on the foot if you say this. Just say “the costs of raw materials increased.” Try to keep it short, simple and believable.
Offer time-sensitive discounts. Offering discounts on a customer’s next purchase is a great way to earn profit – but make sure there is an “expiry” on the discount being offered. Why, because you want customers to come back soon – not a year from their original purchase. People like getting a good deal, and the sooner they avail of the deal, the better. And when they do return, give them another discount for their next visit. This way, you ensure that they give you profit within a specific time period, plus, the possibility of you earning even more is multiplied with every visit of the existing customer.
Offer more products. Instead of selling only mobile phone, why not sell mobile accessories as well? This way, your store becomes a “one-stop-shop” for anything and everything related to mobiles. You may even have an on-board technician, to help customers with minor repairs needed on their units. The more products you offer, the greater the possibility of earning more. Just make sure the new products to serve your existing client base. If you cater to the seniors market, don’t add products that only young people can have use for.
Use Social Networks. Social networking sites help your business get the exposure it needs to make it a buzz-word. The more a person is subjected to raving claims about how nice your product is, the better your chances of increasing sales, and increasing profits. Social networks also allow the opportunity for buyers and sellers to interact with each other. This is good, especially if you have a lot of competition. Remember that some less-determined competitors may have altogether forgotten about using Facebook to promote their business, so any edge you have over them will keep you above your competition. The social networks are also good when you need to inform clients about new products, changes, price increases, or other promotions.
Hire the most competent people to help you. New people give you new perspectives and new ideas which you have probably not have thought of. You will always be the owner, of course – so it’s never bad to hire great people who will help you get more insights, new strategies and who will update you on new trends. Your people will always help the company be more successful – because the company’s success is their success as well. Just learn to reward your employees, and acknowledge their excellent work.
Employees generally aim to please, especially when there’s something in it for them, too. Remember, when you hire, you not only help yourself, you get the chance to help others improve their lives, too – and that’s always a great thing.
Michael Griffiths is the CEO and Founder of My Small Business Marketing Guru. Helping small business owners generate more leads, clients and increase profits with relationship based marketing strategies. We invite you to get your free black mask marketing resources to help you business grow today, when you visit http://www.mysmallbusinessmarketingguru.com.au