Increase Profits with 18 Strategies....... #18
- Adrian Dionisio - business737 owner
- Mar 18, 2021
- 7 min read
Updated: Mar 20, 2024
Increase Business Profits
As kids we had an old neighbour who would come and shout at us because of the racket we made playing hide and seek, tag and other games. Afterwards his wife would often come out to apologise and give us cookies as a peace offering. On one occasion one of us asked why he was so grumpy. At the time it made no sense to me nevertheless I never forgot what she said; “he is purist, a good man with a good heart but he never made enough money so now he is extremely bitter”.
Business is fundamentally about profits. In order for a business to be viable and continue it must be profitable. In many cases doing what you love must be profitable in order for you to continue with it. Bills have to be paid and food has to be put on the table so ultimately your business must be profitable. So always know your numbers and regularly track your profits so you can make all necessary adjustments.
How to increase your profits
1. Increase price
Yes it can be that simple. periodically it will be necessary to increase the price you charge. To make any transition smoother adjust your offering to include more customer value. You can also consider a slight repositioning. Communicate ant changes and where necessary explain how they are with the customer's best interests at heart (for example to increase overall quality and value). Prices constantly fluctuate and always increase over time. It is no different for your business so don’t be scared and don’t overthink it. As long as you are not increasing prices for greed you will encounter much less resistance than you anticipate.
2. Increase customer focus
Your business is all about your customer. The purpose of every business is the customer. Get more feedback from customers to tailor you offer for them. By increasing customer focus you further understand their problems and wants. When you can solve their problems and fulfil their wants your profits will increase.
3. Attract new leads
Creating a demanding for your product / service will increase the likelihood of generating a sale. As long as the fundamental processes of your business are functioning effectively, then attracting new leads will increase the profitability of a business. Remember marketing and attention does not always generate the sale, but a sale is always generated by some form of demand creating process.
4. Feed your winners and starve you losers
Identifying what’s working and what is not. This is so important it cannot be overstated. Every process and activity of a business should regularly be subjected to this review. Enhance activities which are producing desirable results. Adapt or eliminate those that are not. These frequent assessments will result in a healthier business. By identifying your most profitable activities you know where to invest energies and resources. You can alter, adjust or just stop the activities that are not producing desirable outcomes. Evaluations like these, when actioned and performed consistently and thoroughly, will cause a business to grow and increase profitability.
5. Innovate
Innovation is the name of the game. Doing something new or bringing something different to the table can have a tremendous impact on profits. Innovate to stay ahead of your competitors whether via a new offering, processes, skills or new technologies. It is advisable to have feedback systems and innovation initiatives at every level of your business. These can be one of your businesses main sources of competitive advantage and can make you stand out of the crowd prompting the customer to choose you!
6. Redesign systems to be more efficient
When you make any of your systems more efficient the effects will reverberate all the way to the profit line! Increased efficiency means less wastage and loss. It means optimising performance to complete goals and objectives. When systems are fine tuned it means they are better equipped to achieve the outcomes you want, which in most cases is increased profit.
7. Determine your numbers and make changes according to that story
I cannot overemphasise the importance of knowing your numbers intimately . Only then will you be able to see the patterns and really understand the story that your numbers are telling about your business.
You can speculate and make all the assumptions you want. The most accurate conclusions and indicators are drawn from the numbers generated during your daily business activities. Even if you do not do your own bookkeeping or accounts you must frequently look over and pay attention to these numbers. As long as your accountant is not being overly creative, the numbers are going to paint the most realistic picture you can hope for.
8. Seek repeat sales
Give the pot a stir every once in a while at the very least. Get all the juices flowing and mixing together! Actively engage with previous clients and make them aware you are still in business and going from strength to strength because people always like to be associated with success. Whether you simply make them aware of your latest offers, ask for feedback or just make contact to say hello it is always worthwhile to follow up previous leads. Here you will see the significance of your efforts to make a memorable and unique experience for your customer .
9. Kaizen
Kaizen is a Japanese term meaning continuous improvement. It is associated with the world famous Toyota Management systems. Kaizen should be embraced as an ongoing process that continues throughout the life time of any organisation. It can be applied to each and every process of a functioning business. Change is the only constant so we must always change and adapt. It is no different for our business. Kaizen is a concept that should be adopted in our personal life and all corresponding facets of our life. Once this mindset is efficiently and effectively applied to our business, we will see growth and increased profitability.
10. Use technology efficiently
Learn about the technological opportunities and advancements relevant to your field. The correct use and application of technology can increase the efficiency and effectiveness for numerous core processes. This will ultimately increase the profitability of your operations. There are many opportunities to use technology to your advantage but make sure to make the correct checks and research before making any commitments. Learning and adapting is the key component for a successful and sustainable business.
11. Incentivizing customers with specials deals, discounts, or short-term giveaways.
Strategic incentives can be used to encourage customers to spend more therefore increasing your profits. Bundle products or services together to increase revenue hence increase your profit (assuming of course your financial model is coherent).
12. Expand to new area / field
Expansion if done properly can always bring new opportunities. Additional offerings will mean increased revenue opportunities which means increase profits. Consider expanding into related fields where cross over can be seamless. Wherever a door of opportunity opens be ready to grab it with both hands!
However beware because expansion can equally bring more problems. Make informed decisions and as always in business, continually test your assumptions, innovate and learn continuously.
13. Reduce expenses
Profit = Revenue - Expenses
Profits can be increased by reducing expenses. When you know your numbers you will be aware of where exactly money is flowing out of your business. By sourcing better deals you can increase your profits. Be careful not to compromise quality when trying to reduce expense. Short term gain may have unwanted impact on long term prosperity.
14. Eliminate the unnecessary
As a business owner you are constantly learning through experience. Part of this is recognising what is important and integral to fulfilling your objectives and reaching your goals. Streamline wherever possible and eliminate whatever is unnecessary. You don’t want to be carrying excess baggage, you don’t want unnecessary clutter in your house and exactly the same replies for your business; get rid of what you don’t need.
15. Keep employees happy
Happy employees mean a more productive, effective and efficient organisation.
A happy workplace brings enormous benefits from the top down. Happy employees are generally more satisfied with their jobs and more likely to take direction from their leaders. They generally cooperate more with others, perform better and are more creative. The happiness of employees can have a major affect throughout a business and will have wide ranging impacts on overall performance, success and profitability ( read about what matters most to your employees)
16. Stay Visible and Connected
Let everyone know you're still around, you're still active, alive and kicking! Being out there, networking, putting yourself in the limelight will always bring opportunity. Staying visible is an ongoing process which if done correctly will always enhance your reputation and keep you relevant. A new marketing or advertising campaign can prove to be a sure way to boost your profits.
17. Source different supplier
Should the search for new suppliers ever end? Always be on the lookout for new suppliers because you may get better price , better quality and new opportunities to branch off in different directions. Any of these scenarios will increase your profits. Having multiple suppliers will give you more bargaining power in negotiations, give you more options and give you a greater knowledge and understanding of your market.
18. Increase order size / Sell in larger purchase sizes
More units sold means increased revenue and ultimately increased profits! It can be as simple as that. You can up your minimum order size especially when dealing with distributors and vendors. Similar to when increasing price, if you are diligent in your explanations you will not counter much resistance when doing so.
Maximising your business's profits requires strategic thinking and proactive measures. Implement the tips outlined here to drive growth and financial success. Take action now to unlock your business's full potential and achieve your goals
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