I’ve heard a lot lately about “the economy” and customers spending less in some industries. There is concern from some business owners that their profits might be starting to shrink.
Now is the time you want to start concentrating on profits. Be strategic. You are the one in control, and what you do to position yourself will make the biggest difference to your profits.
With a bit of focus, even in a declining market, you can still prosper. However, you will need to concentrate on the right areas of your business to pull this off. You just need to know how.
Let’s go: Here are 3 sure-fire ways to boost profit and they’ll work whether you’re in a rising or falling market.
1. Increase Pricing
Many of my clients do this – and here’s the kicker: very few of their customers even notice! Did you know that even a 5% increase can make a big difference to your bottom line... example: if your sales per year are $1 Million, a 5% price increase gives you $50,000 extra cash in the bank!
What about the fear of losing customers? Well, say you did lose some customers. If your margin is 20%... and you put your prices up by 10%... you’d get the same gross profit even with 33% less sales. Are you likely to lose 33% of your sales as the result of a 10% price increase? Unlikely.
2. Sell More Higher Margin Products
Do you know for sure which of your products/services have the highest margin? Take a good look at your range and work out all margins (on paper). Once you know which products/services to focus on, promote promote promote, to both existing customers and new prospects.
Just being attentive and giving your best products a little push will give you much better results and more profit. Small gains add up.
3. More Leads
Okay, what is a “lead”? We're talking about connecting with a person or business that has an interest in your product or service and the authority to purchase it.
How many new leads per month do you need? How many are you getting? These are numbers you should track.
Every business needs a consistent stream of new leads. Profile your ideal customer (i.e. most profitable, will place a decent sized order, good margins on what they buy, will repeat buy). Target them specifically!
Putting into action a strong plan to get more leads will mean a nice boost in profit. (Of course, you win even more if you convert the maximum amount of these leads into solid buyers and loyal fans, but that is a whole other conversation.)
For more practical ways to increase profit, come to my "Rocket Your Profit" workshop - Tuesday 4 April 2017 - Otago Chamber of Commerce, Dunedin
Find out more here: https://goo.gl/3ZxbGL