To make a business more profitable, owners and managers need to look into ways to increase sales revenue, decrease costs and benchmark the business to see where money can be saved.
Strategies to increase revenue
- Increase the productivity levels of your staff by recognising and rewarding staff contributions with performance reviews. Teach staff sales skills and how to upsell products so customers make multiple purchases at the one time.
- Develop new product lines and get customer feedback on these new products through customer surveys.
- Invest in strategies to find new customers who can help grow your business.
- Use market research to find new markets and determine if you could expand your business into new areas
- Check if you have priced your goods and services correctly to see if you could increase prices without reducing sales.
Strategies to decrease costs
- Streamline your business through stock control and by decreasing your inventory
- Decrease direct costs by making sure that you have the right suppliers for your business. Have a go at negotiating for better prices or discounts when buying in bulk
- Decrease indirect costs by minimising waste and errors in your business through staff training and reduce marketing costs by using low-cost marketing techniques
- Decrease overheads by saving energy wherever possible. Alternatively, a business could keep an eye out for a cheaper energy supply company
- Benchmark key financials; this can help a business compare its costs (rent and utilities etc.) to similar businesses in the industry to recognise if it is paying too much.