Improving your company’s profitability is not as hard as it may sound. However, once you realize that your bottom-line profits should be a top priority for future growth it is important to actively monitor costs and seek ways to improve sales — avoiding profit deflation.
Ten entrepreneurs share actionable tips on how to increase your business profitability:
1. Market to your existing customer base.
The fastest, easiest and most profitable way a business can improve their profitability is to reach out to their existing customer base with an offer to make a repeat purchase. The offer must be related to their initial purchase, restricted to “preferred customers” and remain active for a limited time. Done correctly, it’s not unheard of to see a boost in sales ranging from 30% and higher in less than a month.
2. Strategically diversify your company’s offering.
Don’t pigeonhole yourself or your brand. Think creatively about what services, products, collaborations and partnerships your business can embark on to build awareness and sales while still maintaining its core mission and values. Sometimes the ideas and successes will surprise you. Social media makes this a much less risky concept to embrace.
3. Set market rates for your products and services.
Too often, when starting, you don’t have set rates for your services. This could lead to desperation for business (and you end up selling yourself short) or to rates far above your competitors (which leaves you with no business at all). Make sure that your services are priced competitively and at the appropriate level for your quality of work and experience! Once you have set clientele, then you’ll find you can raise your prices much more easily.
4. Develop hybrid offerings.
Small businesses can improve their profitability by diversifying their offering to include both products and services, not just one or the other. As the owner of a small marketing and PR firm, I was having trouble increasing profitability because every dollar we made was tied directly to my time or my staff’s time. After diversifying and also including products (e.g. ebooks, online courses etc.) in our offering, I expect our profitability to skyrocket.
5. Live (and wear) your brand.
In my business, I do so by dressing apart. I sell a cosmetic product that originates from Morocco, so whenever I meet with retailers, distributors or with customers (trade shows) I wear my traditional Moroccan dress (from the Berber Tribe). It is a great show stopper and conversation starter. Most importantly people remember me and my business! This zero dollar marketing strategy has tremendously helped with my sales, and thus profitability!
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