This week’s content is written by Matthew Collins – a ViAGO international team member!
For most businesses, making a profit is a key business objective. After all, a business cannot continue to exist for long without making a profit. Alas, it is not something that happens overnight and many business owners choose to ‘throw in the towel’ before they give their business a decent chance to make a return. Think about your own business. You have invested money, time, and energy into your business so you should expect it to return to you multiples of what you have invested. That is, more money, more time, and more energy!
To get the right return from your business, it is essential you have a clear focus and a well-planned approach for identifying useful strategies to increase your business’s profitability. This will require that you thoroughly review your existing business model, and other areas of your business, to find ways to reduce costs, increase margins, and maximise profits. Below are four strategies to get the right return from your business.
Increase Your Prices
Increasing prices is one of the most effective ways to drive profits. While it is not always easy to do, setting a higher price (while keeping cost of goods sold low) means you can create a larger profit margin per sale.
As a result, you can:
- Make more money on each sale.
- Widen your margins.
- Improve your bottom line.
In many cases, there may be factors that mean increasing prices is out of your control. For example, you may have costs that begin to rise, such as wages and inflation. You can attempt to cut costs, but you may have no choice but to pass on these expenses to your customers (in the form of a price increase).
Boost Your Sales
The more sales you make, the larger your revenue! Connecting with your existing customers and establishing (and maintaining) a presence on social media are two useful ways to get a return from your business without spending a lot of money. You should continually engage with your customers and ask for their feedback.
Social media is a crucial part of your marketing strategy and key to a better bottom line. Consider running an advertising campaign on Facebook and make sure you take time to update your website, and Facebook page regularly, so that customers are not greeted with content that was last updated six or seven months ago!
Cut Your Costs
No matter what industry you operate in, your business is likely to have operational costs and overheads that ‘eat’ into any potential profits. One of the easiest things you can do to increase your profits is to reduce your costs. Start by reviewing your regular expenses, overheads, and outgoings and consider whether they are all necessary. Is there anything you can consolidate? Could you get a better deal with a different supplier?
Involve Your Team
Every employee in your business has an opportunity to promote your business’s message. This is true even if your business is not customer-facing as your employees will most likely interact with people at least some of the time. This could be during client visits, or off-site work, or simply answering the phone.
To involve your team, you can also implement:
- Roundtable meetings.
- Conferences.
- Lunch meetings.
- Webinars.
You may decide to promote continuing education in your business. If so, it is important to reward employees who seek to further their education and development, and who go the extra mile to represent your business, inside and outside of work. It could be something like a handwritten ‘thank you’ note or paid time off work.
When you are confident your selected strategies will help you to get the right return from your business, you should prioritise them in order of importance. You may find it useful to write down your goals for each of the strategies, as well as specific details about how you will achieve these and plans for implementing each one.
Your business is probably your biggest asset. You need to make sure you are investing wisely, and getting the best return possible from it. For some other quick tips about how to run a successful business, try visiting our website for productivity improvement skills.
Matthew Collins joined ViAGO International in 2018, and spends most of his work day editing content prior to submission for publication. He is passionate about the tools ViAGO International uses to help business owners and managers transform their business ‘from Chaos to Calm.’