4 Ways to Increase Your Business Profits Rapidly
small business administration
The current global economic climate is testing the resilience of many businesses and only the strong will survive. The rate at which small businesses are failing is astronomical and yet much of this business tragedy can be averted if simple steps are taken by the small business owner.
Some of the ideas below will support you in weathering the storms that most businesses are facing and will enable you to emerge stronger, well-positioned for the coming boom times.
Study your Market
It is easy to get blind sided by developments in the market place that we didn’t see coming. Keep in touch with business forums, trade associations, influential online business sources and other high-impact networks that will provide you with an understanding of major trends or developments affecting your industry. Market intelligence is an imperative; A wise business leader once told me, “success comes from knowing where the world is going and getting there first.”
If you understand what your customers and potential customers (the rest of the market) desire, better than your competitors, this will enable you to serve the market more effectively, build your market share and position you for increased profits.
Know your Competition.
Whether you choose to believe it or not, some of your competitors are doing something better than you. Effective leaders set aside their egos and seek to learn what makes the competition superior in any specific area. Study what your competition is doing and creatively apply the lessons learned to improving your own business.
Do you have competitors who charge higher prices for products which you feel are of perhaps lesser quality than what you offer? Don’t get mad at them! Find out why the market thinks their products are worth the price.
For example, if you run a restaurant, have some meals in the establishments of your successful competitors. Study their customer service, their prices, any offers and perhaps any after-sales service. If they have a newsletter for clients, subscribe to it and get an insight into their current thinking. This competitor intelligence should help you generate ideas on how you can improve your various aspects of your business.
Innovate – Develop Added-Value Premium Products
Many small business owners often make the disastrous mistake of trying to compete on price alone. They erroneously believe that lower prices would automatically be attractive to potential clients. However, this is a recipe for trouble because such low pricing often leads to two major challenges:
- It creates a wrong impression in your customer’s mind that your products might be of lesser quality.
- Such low pricing would generate lower profits, severely restricting cash flow and has been known to result in a business going bust.
The alternative scenario is for you to develop premium products based on higher quality and added-value, which you can market to your current and prospective customers.
As an example, a personal trainer who provided standard keep-fit classes decided to re-organise his business to provide a 12-week intensive high-impact toning programme, complete with his own recorded DVDs and workbook. Consequently he went from charging approximately £40 per hour for regular keep fit sessions to approximately £7,000 per client for a 12-week programme. Not a bad result for value-added innovation.
Explore how you can creatively develop new products that will add greater value to your clients and for which you can charge premium prices, thus improving your profit margin.
Reduce Your Expenses
As Benjamin Franklin reportedly once said, “If your outgoings exceed your income, your upkeep will be your downfall.”
Look at all areas of your business to see where you may be spending more than you need to. I have helped several clients save lots of money, ranging from about £250 per month to over £6,000 per month by simply looking at key expenditure items and showing them how they could get the same or even better quality results at a fraction of the price. As a simple example, take a look at this website, http://www.fiverr.com and see how you can have some of the current work in your business outsourced at a fraction of the price you are currently paying.
If you apply these four ideas in your business, I can virtually guarantee that you will be able to increase your profits and be strategically placed to accelerate your success in the next three months.
Yemi Akinsiwaju is a Business Growth & Leadership Development Consultant helping major organisations in the U.K successfully improve their business results.
He is also an international speaker, a coach, mentor and business strategist to SMEs and a published author of the highly acclaimed personal development classic, Scorecard: Achieving Success and Balance in A Turbulent World.
He can be contacted via: http://www.DaySpringConsult.com
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Category: Small Business