When you give lots of keynotes or public talks to business owner and entrepreneurial groups like I do you become hitting with the same questions over and over.

One of the most common questions I go is, "How do I increment my profitability?"

It's a great question. Hither in ane listing are 30 simple strategies to increase your profits and turn a profit margin. I've already "field tested" these ideas in my work with my company's business coaching clients over the past decade. They work, if you put them into practise.


Hither nosotros go...

  1. Increase pricing. Bar none this is the easiest respond for many pocket-sized companies, especially those who have been in business for a while. Most businesses set their prices when their business was first launched, and since they were so hungry for business organization, they fix pricing levels depression. Over time, the business likely just made nominal increases to pricing every few years, but rarely did the owner e'er sit down downwards and fundamentally rethink his or her pricing model. If it'due south been over a year, fourth dimension to expect at it over again.
  2. Redesign workflows and systems for greater efficiency. Cut steps, reorder processes, reengineering physical workspaces, etc.
  3. Eliminate tasks and activities that don't add together value to the company or customer. Every dollar y'all save by eliminating the cost of things that don't add value to your company or to your customer drops directly to your bottom line.
  4. Give your squad a clearer motion-picture show on means they can contribute to profitability. Every squad member is an amanuensis to increase profitability. Empower them to be role of this search for ways to increase profitability.
  5. Regularly review your administrative and operational staff levels closely. Most service and administrative departments tin be cut by one in 4 with no impact on quality of work. Many tin handle 1 in 3 cutting with no significant negative touch.
  6. Expect for means to increase value to clients and customers. This will help you shorten your sales bike, increase your closing rate, lengthen your client retention, and perhaps, increase pricing.
  7. Increase the dollar value of every buy transaction with your clients. Think upwardly-sell, cross-sell, and resell... Ask, "How tin I get each customer transaction to be for a larger dollar amount?"
  8. Beware the steep cost of attrition. Customer retentivity is a strategic expense if spent wisely. How can you increase your customer retention?
  9. Feed your winners; starve your losers. This includes with your marketing activities, your sales strength, your full general staff, your company initiatives, your reporting, etc. So cut your losers, and feed a portion of the saved fourth dimension and money into your winners. This will profoundly boost your profitability.
  10. Feed your winning sales people more leads (even if that means you lot starve your lower performing sales people of leads.) Audit the "$ value per visitor generated pb given to a sales person." This is not a time to be "off-white", but to exist strategic. Exist transparent about this and let information technology be a spark to assistance Fred learn how to increase his own dollar value per company lead given to him.
  11. Renegotiate with your landlord. You'll never get what you don't ask for. Create clear options for other space you could lease and have a middle to heart with your landlord most reducing your lease rate. Even if they say no you can always give them a fallback request to give y'all an pick to extend your charter without an increase in rent.
  12. Focus your best efforts, talent, and attention on selling your most profitable products, services, customers, niches, or channels.
  13. Strategically map out a pathway to upgrade your top ten-20 percent of clients to "blood-red carpet" or "highest value" offerings. They desire this service, will value this service, and volition pay for this service.
  14. Look for means to package products and or services so that you lot increment the average ticket cost of every auction.
  15. Sell your product or service in larger purchase sizes. This could mean that rather than sell a 10 hour package of time you sell in 20 or l hour sizes. Think about this as selling a bigger box of your product or service.
  16. Strategically consider giving pricing or other incentives to make the buy and use of your product or service in larger unit sizes compelling.
  17. Strategically map out systems to help your customer swallow your product or service faster and then that they go more value and hence repurchase more frequently. Expect for means to educate them on the ideal use of your production or service.
  18. Make buying from your easy and simple. Reduce barriers to entry. Reduce frustrations or hurdles to re-buy.
  19. Shift a toll from a fixed to a variable expense to give yourself greater flexibility. This is a way to protect your cash menstruum. It is extremely important for unproven tactics and strategies. For example, pay per sale versus a guaranteed corporeality for an exterior sales person.
  20. Shift a toll from a variable to a fixed where the value is proven. Make this shift just when you can negotiate a substantial price savings by doing so.
  21. Consistently look for means to lower your fixed overhead. Scrutinize your base expenses to eliminate non-strategic expenses that just don't add value to the company or to the customer.
  22. Stabilize your production systems so that you can reduce need to stock as much inventory and raw materials which are a drag on your cash flow and on your gross profit margins.
  23. Consider buying "off-the-shelf" versus designing or developing a tool (due east.chiliad. software, car, etc.) from scratch. Unless you lot are in the business of designing exactly those types of tools you'll well-nigh always find your estimates of the price to build from scratch are hundreds of percent too low. Plus, you lot won't have the install base to update that tool, for example with later software releases, at a cost anywhere as shut to a third political party visitor who can amortize these ongoing waves of new versions over a much larger user base.
  24. Negotiate difficult. Have the time to program out your negotiation strategically. Create contest for your dollars. Create a list of concessions you lot want, with extras for you to trade off. Research the market to improve understand the best deal you tin expect. Even hire an experienced negotiator to assistance you brand the purchase on the best toll and terms yous can. If the nugget you're buying for your business is large enough, the ROI on your negotiation work can be immense.
  25. Specifically -- negotiate and go competitive pricing on your merchant accounts. This one tactic will likely yield an actress .25-.5 percent to your lesser line with very little try. (Recall of what this means. If yous have a fifteen percent operating profit margin, an .25-.5 per centum increase to your dollars of profit is the equivalent to selling ane.67-3.33 percent more than. What does this really mean? If you take $10 meg in almanac sales with a xv percent operating profit margin, then a .5 pct decrease in your merchant account fees adds the same profit to your bottom line as selling an boosted $330,000! Not bad for what will probable have your controller ten-15 hours of her time to negotiate.)
  26. Beware "hidden" R & D costs for pet projects and bright shiny opportunities that don't lucifer up with your visitor's strategic plan.
  27. R & D is non only a tech or pharmaceutical visitor line item. If you piece of work on new means to create a product or service that y'all will ane 24-hour interval, "downwardly the road" sell to the marketplace, You lot have R & D. Be strategic about where you invest your visitor's dollars.
  28. Go articulate on all the costs of inventory: price of majuscule; storage; insurance; etc. This volition help you make informed stocking levels.
  29. Consider selling off or writing off old inventory. Why pay to store stuff you actually don't have a utilise for. Complimentary upward the infinite and greenbacks tied upwardly in that old inventory. Sell it; donate information technology; scrape it.
  30. Set optimal inventory levels and stick to them. Constantly be on the lookout for means to safely reduce your inventory levels.

There you have 30 uncomplicated ways to increment your business'due south profitability.

If yous want to learn more than about how to scale your business, I'm nearly to teach a new webinar that will focus on the central steps you need to take to grow your business organization and get your life back.

If you'd like to join me on this special webinar training, please just click hither to learn the details and to annals. (It's free.)