Take it from me – running a small business has never been more challenging.
Iâ€™ve been in business long enough to know that growing profits against the backdrop of today’s volatile political and economic landscape is no mean feat.
But whether you’re operating from a relatively comfortable position, or you’re tightrope walking a razor-thin profit margin, actively taking measures to increase profits is crucial to the success of your small business.
Well, you see, if you stop refining processes and pursuing profit, you run the risk of stagnation. And when you’re simply trundling along, it can be difficult to effectively respond to certain market challenges and opportunities.
But with your finger firmly on the financial pulse of your business, you can sidestep cash flow concerns and swat aside competitors with ease. Improving profitability should be an ongoing endeavour, and in this blog post, I’ll share 5 incredibly simple ways to do just that.
5 straightforward ways to increase your profits
1. Minimise and Eliminate Expenses
Often it’s not about making more money when attempting to improve profits. Rather, it’s about spending the money you make more efficiently.
Put a date in your diary each month to review your expenses and identify opportunities to cut back on business spending and overheads. If you can negotiate a better deal with a supplier, streamline production costs, or even switch to a cheaper broadband provider, those savings will very quickly add up!
2. Audit Internal Systems and Processes
If your money could be spent more efficiently, ask yourself, what about your time?
Are you still reliant on manual data entry? Are you continually sidetracked by unproductive and inefficient tasks? Review your internal systems and processes and pinpoint improvements.
As your business grows, you need to be prepared to delegate certain responsibilities, giving you the opportunity to step back and focus on the big picture as you pursue profits.
3. Embrace Automation
A follow-on from the previous suggestion, one of the most effective ways of improving your internal workflows is to introduce automation to your day-to-day.
Cloud-accounting platforms, such as Xero, and smartphone applications, like Receipt Bank, can help you streamline processes and work in real-time. And this means your decision making will improve as you refer to accurate and up-to-date numbers.
4. Audit External Paths to Purchase
Hereâ€™s a question: Are you making it as simple as possible for your customers to buy from you?
The journey to improved profitability could be made a great deal easier if you remove the roadblocks affecting your conversion rates. If youâ€™re asking prospects to jump through hoops before parting with their cash, you might not be converting as many as you could and should
Simplify the path to purchase by auditing your website and marketing materials to ensure the sales process is as short and as painless as possible.
5. Raise Your Prices
You read that right.
Now, I understand this might seem a little counterintuitive at first. But once you’ve streamlined your expenses and internal workflows, even a marginal increase in prices could bring a major boost in profits.
Of course, the risk attached to raising your prices is that a small number of customers will leave in pursuit of a better deal. However, that’s typically offset by those who remain, and so long as you maintain a healthy working relationship with your client base, they’ll be understanding of a slight price bump.
Want to improve profits? Caplan Associates can help!
Even when youâ€™re armed with the above tips, it can be difficult to know just where to start in the pursuit of improved profitability. Sometimes you need a plan, and a guiding hand to help you execute.
I can help with both.