How To Make More Profit In Your Small Business

Often, the first thing we think of when we want to make more profit is to put up our prices. While that’s a legitimate strategy, it’s not the only way to boost profit and bring in more income. Today we want to show you a few different ways to increase your profit without having to change your prices.

Set a profit goal

There’s no doubt that setting a daily, monthly or even a long-term goal makes a difference. If you know you need to make $1000 every day, you quickly become more aware of how you spend your time and what your time costs you. You’ll also pay closer attention to your income and expenses. To reach a profit goal, you need to track costs, target profit, and control overheads.

If this type of financial planning isn’t your forte, talk to your business bookkeeper who will show you how your business is performing, where your best income comes from and where your money goes. But in simple terms, set yourself a goal to aim for each day and go for it.

Cut back your costs

Logic says if you reduce your costs you make more profit. How long is it since you examined your expenses and made some cuts? Look beyond your bills and delve into the way you work to find those hidden costs you hadn’t realised you were carrying.

• Are there services you’re offering which suck up all your time and energy for little return?
• Do you have clients who also take up your time and energy on small, inexpensive services?
• Are you carrying a product line because you love it even if no-one else does?
• Are you offering too many products or services for your business to deliver well?

When you trim back the parts of your business which are costing your more than they’re worth, you not only save on costs, you’re free to deliver a better-quality product and service to your clients.

Narrow your target market

It’s a lot easier to market to a smaller customer base than it is to a broad one. If you’re trying to service a wide range of customers, you need a wide range of offerings. They’re not all going to make good money for you and may end up costing you more than they bring in. If you niche down, you can reduce the number of products or services you offer an do them well.

You’ll also save money on your marketing costs because you’ll be able to create targeted campaigns in the kind of language your clients use and be noticed. Remember, generalists can be great, but specialists can be better.

A sustainable and profitable business is built on a solid financial foundation of which pricing is only a part. If you’d like to understand more about the financial side of your business, or have it managed for you, give us a call today.