One of the goals of running a small business is to make profit, because small businesses that aren’t profitable can’t stay up and thrive, this means that it’s on the verge of crumbling.
Generally, increasing your total profit for the year usually requires increasing sales; however, if you’re not careful, the cost of increasing sales could lead to decreased profit margins or even a loss.
There are various strategies small businesses apply to increase profitability, some of these strategies don’t require drastic measures like upping your prices or laying off employees. Some of these strategies are small changes in just a few areas of your business that can boost profitability in your business.
Some of the strategies include:
1. Gathering More Leads
One of the major ways of boosting profitability is by gathering more leads and marketing to them. In addition, you can go ahead to collect their contact information and reach out to prospective customers.
Many small-business owners don’t take nearly enough time to follow up on leads. However, this can be one of the greatest areas of waste in any business, because it is not enough to gather leads, as a business owner you have to ensure that these leads are followed up. Regardless of the number of leads you gather, if you don’t follow up on them as much as you should, chances are that you might lose these leads, this means you might lose prospective customers.
In order to follow these leads, you have to come up with a plan for following up with the hot leads by listing various steps to constantly reach out to them either through calls or through emails. Decide on how you will handle leads from customers who don’t appear to be ready to buy by keeping in touch with them through weekly, monthly or twice monthly newsletters where you feed them with recent products and services from your brand. The newsletter will let you stay in touch with and convert lukewarm, not-yet-ready-to-buy prospects into paying and loyal customers.
2. Staying Visible and Connected
There is no secret to staying visible other than making your small business visible offline and online. Take your reputation online, using social media, your website, and a blog to connect with clients and make strategic connections.
One other way to stay connected as a small business is by acquiring certain licenses, and certifications, which can boost your business and set you apart from your competition.
In addition, you can take advantage of referral selling, and take advantage of affiliate marketing tools to drive new customers to your site and create strategies to turn them into loyal customers.
3. Increase Operational Efficiency
The fact that you have always done something a particular way doesn’t mean it’s the best way to do them. This simply means that you have to introduce and apply new ways to carry out operations to give your business a significant boost.
One of the ways to increase operational efficiency is by generating more sales while reducing expenses and eliminating certain activities or responsibilities that are not necessary for your business. This can be carried out by carefully writing down every activity carried out by your business and the amount of time it takes to achieve them, and then you can eliminate those that are not needed.
4. Come up with New Products or Services
This is one of the major ways to boost profitability in small businesses, by coming up with new products and services that are adjacent to what the business already sells or products that complement what you already offer.
Business owners can ask their loyal customers the kind of products or services they would like to see and purchase, this will guide business owners to learn where they can get the most value for their investment.
It is also important to research the market before going into any new product or service, by identifying the kind of margins these products and services will offer, as this will guide them to go for products and services that offer significant profits with less overhead costs.Featured image source: Sharon Spano
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