Profit is at the bottom line of every business scorecard. But just because you pencil it into your plan doesn’t mean it will automatically happen. According to recent research by Patricia Sigmon, author of Six Steps to Creating Profit, nearly two-thirds of small businesses either didn’t make a profit or failed to increase their profit from the previous year.
Here are strategies to follow as you make your business more profitable:
Change your procedures.
Take a close look at your operating procedures and ask yourself, “How can I laser focus on generating more sales while cutting expenses?” Considerations include:
- Cross-selling: Offering new products or services that complement your current ones.
- Switching to a relationship-based sales model: Enticing customers to come back to you. For instance, you might offer a monthly or yearly service plan or a bundle of visits or purchases at a discount.
- Auditing your administrative functions: It may be more cost-effective to outsource certain tasks, or consider hiring temporary or part-time employees instead of full-timers.
Set yourself apart from the competition.
What makes your business unique? Identify these competitive differentiators and make them the core of your marketing and communications. With this in mind:
- Optimize your online presence. Use your digital, mobile, web-based and social platforms to connect with target market clients, continue to build existing profitable relationships, and make strategic alliances.
- Look into ad sharing with complementary businesses. Also, find ways to leverage referral selling and take advantage of affiliate marketing.
Make everyone a salesperson.
Every one of your employees has the opportunity to spread your company’s message in a positive way, so get them motivated and empower them to do so.
- Encourage ongoing self-development to keep your employees invested. Use effective communication, training, and career growth opportunities to keep team members aware of company progress and the role they play in organizational success. And remember to reward people for making an extra effort to represent your business both inside and outside of work.
It all comes down to customer service.
It’s basic economics: The key to optimizing profits lies in your ability to increase your revenue at a higher ratio than your costs. You need to continuously generate the maximum value from each customer and upsell them additional products and services to keep your business healthy.
- Make sure every customer experience is positive. This will lead to word of mouth referrals and repeat business. Remember, although both are critically important, it’s much less expensive to keep a loyalty than to secure a new one.
Looking For Ways To Be More Profitable?
Employment costs can make or break a business. Professional employment outsourcing and partnering with a PEO can often be the best strategy for small to midsize companies. In fact, research has shown that businesses working with a PEO grow 7 to 9 times faster and are 50 percent less likely to go out of business. At Lyons HR, we make doing business more profitable. Contact us today, to explore how you could be more profitable.