When you run a business, it is important to make a profit. It’s even more important to be able to increase that profit when the time is right, putting more money into the business (and your pocket) and making it a more successful venture. Finding ways to increase your profits can be difficult, but there are always ways to do it when you start to look. Here are some good ideas to get you started.
Encourage Your Customers To Buy More
When you already have customers coming into your business or buying online, you have done a lot of the hard work – you have let them know you exist and told them where you are. You have persuaded them that your products and services are the ones that they want. These are all positive points and is certainly something to be proud of.
Your job doesn’t end there, however. In order to make more profit, you will need to encourage these current and perhaps past customers that they should by more from you. This could be done by upselling and letting the customer know what other people bought and how useful these items were. It might be by adding a service plan to the product. You could even have items for sales at the point of purchase that might grab their attention, for example. It is worth taking the time to learn more about how you can achieve this through some simple preparation. If you can persuade an existing customer to buy more from you, this will increase your profits, and you won’t have to pay for additional marketing.
Raise Your Prices
Raising your prices is a simple way to make more profit in your business, but it must be done carefully. Suddenly putting all your prices up without warning, and putting them up too high, will simply push your customers away and they will buy from your competitor instead. This is why you should price your products and services well in the first place because if you start too cheap and then have to raise the prices, you will be doing everyone – including you – a disservice.
If you are reluctant to put up your prices, then you could try to negotiate with your supplier for a better rate. Ways to do this include entering into an exclusive contract or paying in advance. If you can pay less for your products, then you will still make a bigger profit even if your prices remain the same.
Referrals are a wonderful way of promoting your business without having to spend any money to do it. If you do a good job and a customer is happy with what you have done for them and the money spent, they will tell others about you, which will result in more sales and better profits.
To boost your chances of this happening, you could set up a reward scheme where those who introduce others to your business receive a percentage off their next purchase (for example) if their referral buys something too. There are many ways to go about this, but rewarding people for talking positively about your business is always a good strategy to take as it makes everyone feel good about what you are doing.
Networking when you run a business is something that can help you hugely. Getting out there and talking to potential customers and suppliers, selling yourself and your business to them in a setting in which they expect this to happen can really help to increase your confidence and help you to make many more sales than you might have done otherwise.
There will always be networking events taking place near to you, and there will be one that suits your business and your free time best. You might pick an early morning breakfast meeting, for example, or a lunchtime meet up might be better for you. Search around until you find something that will work and go along – often the first meeting will be free so that you can see what there is out there for you.
Alternatively, you might want to arrange your own networking event. This might be a case of sending out invitations to the people on your mailing list, asking them to come to your store, or another venue if you work online, to meet you, chat about the business, and enjoy some of your hospitality. You might even use this opportunity to launch a new product or service, and this will give you the chance to re-look at your prices too.
Ask Your Customers What They Think
If you’re struggling to think of ways to increase your profits in such a way that won’t drive your customers away, why not ask them what they think? You could do this informally when they are at the checkout, simply chatting to them and suggesting something new to gauge their reaction, or you could send out a more formal questionnaire through email or drop it into their shopping bag when they have bought something.
Sourcing this information has a number of benefits. The first is that you will know what it is your customers expect from you, and what they like about your business as well as what they don’t like. This means you can keep doing the things that are working and stop the ones that aren’t (this is particularly useful if these things are costing you money). Secondly, it shows your customers that you care about them and want to know how you can make things better for them; in order words, you’re not just interested in making more money for yourself without thinking of what the customer would want.
Combined, these benefits mean that your customers feel appreciated and listened to, so they will come back to you time and again, plus they will spread the word about your business.
Finally, if you want to increase your profits, you need to decrease the money you are spending on your overheads. Do you really need an office, for example, and are you paying for too many staff when a smaller team would be better? These can be difficult factors to think about and even harder to action, but if you want to make more profit then sometimes it will be necessary.