It’s estimated that nearly two thirds of small to medium businesses either don’t increase their profits from the previous year’s trading, or fail to make any sort of profit at all, thus remaining static.
What can business owners do to change this and what are the key strategies that can be employed to ensure that costs can be cut, bottom lines improved, and profit margins increased?
Look at reducing your expenses while at the same time trying to generate more sales to maximise profits. To do this, look at something called cross selling. This is the notion of offering new goods or services that complement any existing offerings you have.
As an example, think about someone who works in private medical practice such as a physiotherapist. They might offer private sessions of physical therapy, but as a side-line start to offer vitamin supplements as well.
Another option is to try to entice new customers to your business by offering discount deals, special prices or competitions and giveaways.
In terms of reducing expenses, look at giving the administrative side of a business an overhaul. What tasks can be completed in house, or absorbed by other members on your team at no extra cost?
Make Sure You Remain a Trusted Business
What can you do to set yourselves apart from other businesses? One tip is to make sure your reputation precedes you (in a good way). Staff should all be well trained with proper accreditations and certificates. Make a good name for yourself online with professionally set up and run social media accounts and use these to entice new clients and forge good alliances.
Review your business alliances, and if you’re not already allying with other businesses that complement what you offer, do so. This will ensure that you remain a viable and credible option.
Examine your cash flow and maximize profits
Stabilize your cash flow and learn how to effectively discuss pricing with ongoing clients and new ones. One way is to offer retainers and ongoing prepayment plans for people you have been doing business with for a long time.
Negotiate, discuss, and learn how to establish relationships that keep the door open for more work in the future. Also, if you have a client you’re very keen to work with but are having difficulty securing, seek to find the best alternative in a negotiation with them and a plan of action that works for both sides. Ensure they’re happy with the service you provide and that it is economically viable for you.
At first, this may not seem like a good idea, but it puts into place the framework for a good future relationship and may well influence future work.
Up your marketing game
Immediacy seems to be the name of the game these days, with the advent of social media and business networking platforms such as LinkedIn. However, traditional methods such as meeting for drinks, or a business lunch are still effective and offer a much more personal touch, so if you’ve got out of the habit of using these methods, then now might be the time to reintroduce them in order to forge new connections that will help encourage economic gain.