For many small businesses, the best way to improve profitability is to increase turnover, as there’s no limit to sales but there is a limit to how much you can reduce your costs.
Let’s look at how you can focus on each of the five ways in our profit increase calculator to achieve your goal of improving profits.
By interacting with greater numbers of people, you’ll increase your chances of turning more consumers into customers – or at the very least, having them lead you to potential customers.
For example, if you own a convenience store and you can come up with some attractive signage out front to get more people into your store, you’ll increase your leads.
So what can you do to increase leads or make more people aware of your business? A few tactics you might consider using to increase your leads include:
How many potential customers walk out of your store, leave your website, or inquire about your services without making a purchase?
Just imagine if you could convert ten percent of those people into customers. How many extra sales per day would that be?
A few tactics you might consider using to convert more leads into customers include:
If you can entice your customers to buy just one more item from your business each year, your sales (and hopefully your profits) will increase.
A few tactics you might think about using to increase the number of items you sell to each customer include:
Can you come up with some ways of increasing the average value of each sale you make? Rather than hiking up prices, see if you can increase prices by small margins (like 1-3 percent) or find ways to sell higher-priced items more often.
A few tactics you might think about using to increase your average sale include:
An easy way to increase your net profit is by lowering your fixed costs (business overheads). Identify your top five expense items and track any changes before taking steps to reduce them.
A few tactics you might try to increase your net profit percentage include:
Review these five ways of increasing your profits at least every year. In the meantime, plug some figures into our profit increase calculator to test what you could change and the effects of those changes on your profit.
By using simple, practical steps, you can improve your business’s profitability.