10 Ideas How to Increase Your Profit Margins

The Loch Ness Monster

You know that sales, alone, aren’t an indication of your business success. The true measure of success is your business profits.

Alas, for most small business owners – profit is a little like the Loch Ness Monster. They’ve heard of it, but never seen it.

Increasing your profits doesn’t require drastic measures. Even small changes in a few areas of your business can give your bottom line a big boost.

Here are 10 ideas you can use to increase profits in your small business:

1. Get More Leads and Market to Them

Whatever you do to collect contact information and reach out to prospective clients – do more of it. Promote on your website and in your social media channels free, value-packed lead magnets will get you more leads to add to your mailing list marketing.

2. Convert the Leads You Already Have

You need to have a strategy and a plan to follow up on EVERY lead – hot, warm or cold. And you need to keep following them up, delivering value and encouraging engagement – until they get to know you, like you, and trust you enough – to buy from you.

3. Add New, Related Products

Offering your existing clients valuable and relevant new products or services is an easy way to increase the size of orders and attract more clients. Ask your current clients what types of products or services they would like to see, then create them..

4. Increase Your Prices

Most small business owners undercharge… The right price for your product or service is as much as the client is willing to pay (but not more than that). How do you find it out? By experimenting. Keep increasing your prices, until you start seeing a decline in your sales figures.

5. Increase Order Size

Use upsells (e.g. get another one for half the price, get a maintenance contract, or a recurring supply) or cross-sales (e.g. if you sell a therapy or a workout session – offer vitamins, supplements, stretch bands, or other equipment) – in order to increase the order size. You collect more revenue without the added costs of sales and marketing.

6. Add Recurring Income Streams

An important type of product or service you should create and promote is anything that can be sold once, but you get paid for it every single month… Subscriptions, memberships, product of the month program, refill of consumables… the sky’s the limit.

7. Cut Expenses

Increase your profits margin by cutting expenses like switching to a cheaper supplier, buying less “stuff” or reducing staff or staff hours. Every cent you save is a cent you earned.

8. Fire Some Customers

Not all customers are great for business. If you have a customer who is costing you more than it brings, or negotiating prices that are unreasonable, then maybe it’s time you fire the customer.

9. Eliminate Non-Profitable Products

Products or services with higher profit margins are the most important for your business. You must concentrate all your efforts on them. Identify the products or services that don’t contribute to your business, see if you can improve them or if removing them is a better choice.

10. Increase Your Return on Investment

You should evaluate each marketing method you are using to see which is paying off the best. It might be time to eliminate one or two marketing tactics to focus more on the top one or two that give you the greatest ROI.

Now It’s YOUR Turn

For five minutes… come up with as many ideas as you can… how can you increase your profit margins?

Let's Brainstorm

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Please share your ideas (all of them or just one) in the comment box below… and let’s get WOWing.

Live fully, stay awesome,

Nisandeh Neta

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