7 Proven Ways to Make Your Business More Profitable
If you run your own business, you know that at times it can be a struggle just to keep the lights on. Sure, the past year might have been good, but you never know what the future will bring as the possibility of a recession, increased competition, or a change in business models could have a dramatic impact on your business.
As such, you always need to be constantly on the lookout for ways to make increase your sales and reduce your costs. Here are seven proven ways to make your business more profitable – think of it your lucky seven to increase how much money you have in your bank account at the end of each month.
- Speed to Market
Winning in business often depends on who can be the first to the market with a new product or idea. Often those who are first can own the market and a big part of this is to hone your product design cycle to help you get there. In addition, the fast you can develop new products, you should be able to bring down your costs and this means that you’re not only developing new revenue streams but also saving money in the process.
- Eliminate Waste
While this goes without saying, you would be surprised how many business owners turn a blind eye to the duplication of efforts. Wastes can creep into business processes due to overburdening equipment, unevenness or fluctuation, and variation. Simply put it is any step which does not create value for the customer. Granted, there are times when you won’t have a choice due to regulations or safety concerns but whenever possible these “wastes” should be minimized.
- Schedule Better
Without a doubt, labor-related costs are one of the highest costs for most businesses and this means that scheduling is an important aspect of control. Proper scheduling will allow you to have the right people, in the right place, at the right time and means that you not only need to have a good idea of future demand but also the capabilities of your team.
If you don’t have a good forecasting tool, then you can search online for templates. Or you can even do one better by seeking out bookkeeping services for small business as the right bookkeeper will help you to better track your sales. Part of this is not only knowing what days of the week are the busiest but also the time of day. In addition, look at cross-training to ensure your team has the flexibility needed to meet customer demand.
- Change Your Spending
If you want to cut costs, then you need to know what you are spending money on. Again, this goes back to having a good bookkeeper on your side, but the real key is taking it a step further to change your spending habits. This includes taking a good, hard look at every dollar you spend and asking how this will help your business grow.
- Convert Leads to Sales Faster
Every business needs customers to survive but sometimes the quest for most customers can lead to losses. One way to reverse this trend is to convert leads to sales faster. This is done by identifying the key steps in your sales process, tracking your progress, as well as learning why certain leads stall while others convert to sales. This will help you to determine where you are losing money in your sales cycle.
Beyond this, you can make better decisions about where to deploy your sales team and on which customers to chase and why. So, if you want your business to be more profitable, then start converting leads to sales faster.
Here’s a secret about your customers – you’ve already spent time and money to win them over, so you want to make the most of your relationship with them. The best way to do this is to upsell your customers, maybe its an add-on sale or it is getting them to commit to a subscription of some sort.
Think of it this way, Starbucks has been able to convince millions of customers to deposit cash with them for use on their app. These deposits (usually $10 to $30) per customer can add up to hundreds of millions for a large company. But they also mean that customers are less likely to think about the cost of a purchase when they visit – this makes the customer more prone to spend more each time they visit.
- Get Your Customers to Visit More Often
Now, some experts might recommend raising prices to increase profitability, but we live in the real world and raising prices means that you will chase customers away. However, there is another way – get your customers to visit more often.
This not only means that you can make the most of your customer relationships, but it also means you need to spend less on sales and marketing. If you want to make more money and you don’t want to raise your prices, then find ways to make your customers fall in love with your business.
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