53 tips to increase profits in any business
When I first began to write this article, it didn’t begin as 53 tips to increase profits in any business. I began by wanting to beat the top list on Google, which at the time of writing was 10 tips. As I wrote each one, new ideas and tips came to me, which have all come from my experience in business, and from advising others in their businesses.
I will begin by saying that your business profits are the most important key to a successful business, with one exception, which is:
CASH IS KING – without cash your business will not survive for long, as it is the life-blood of any business – please feel free to read our white paper on ‘Cash is King’. So make sure you are collecting the cash from your customers, in order to turn your profits into cash in the bank.
Your business profits are affected by many things, both directly and indirectly, but the best way to increase your profits is to target strategies and work with your team to make it happen.
This article looks at 53 tips which will all have an impact on your bottom line, with some having a greater impact than the others.
So to begin with you need to look at what factors affect your business and what strategies might work for you. This article is designed to be generic and most of these suggestions should work with a wide variety of businesses.
However, with some of the tips you could argue that they are on the edge of what you might think relates to targeting profit increases, but even where you might begin to question any of the tips, carry on reading and in the end you’ll understand my way of thinking here.
I wanted this list of tips to be as comprehensive as possible, and I have gone all out with my thinking to include as many ideas as I could. I hope that even if you’ve either already addressed some of the tips on this list, that you will at least find one or more ideas that will help you to grow your business and to increase your profits.
So what are the 53 tips to increase profits in any business?
1. Customer service
I have deliberately put customer service as the number one priority on the 53 tips to increase profits in any business. If your customer service is not as it should be, you will be ‘leaking’ profits all over the place.
I’m going to explain this by way of example. If you provide a less than perfect customer service experience, this could cost you by clients bad mouthing you, by clients asking for money off, by having to make more phone calls to appease the customer, and so on. Each one of these outcomes, and I’m sure you can think of others that have happened to your business where customer service has failed, will impact on your costs and revenues, and therefore on your profits.
2. Customer testimonials
Leading on from good customer service combined with great products or services, you’ll get some great testimonials. You might initially be thinking how can testimonials increase my profits…well this is one of those tips that is a little bit on the edge. A good customer testimonial, used in the right place, is more likely to attract more leads. Plus these leads are more likely to go ahead and purchase, as a result of hearing what someone else says about your products or services. This makes the cost of your advertising more effective, which ultimately will drop to your bottom line.
3. Customer referrals
Good customer service and having customers that are happy to rave about your business, will lead to referrals of yet more customers. This is either going to be a ‘FREE’ source of new customers, or even if you pay your customers to refer people on, these are likely to be a cheaper source of leads over advertising for ‘non-referred’ customers. This will in effect help to increase your profits. Look at developing a customer referral program, as although you might say you get a significant number of clients by referral, you may not be getting the most out of this.
4. Lead generation
Focusing on your lead generation, and how well this works, is always a good cost to review. Depending on how you generate your leads and what this costs, will depend on how much this could effect your business profits. So for example, if you run adverts, be it in paper form or online in the form of Google pay per click, it’s important to review how well your adverts are converting to leads. This comes down to focusing on how good your advert copy is and/or your imagery is.
But always remembering that people don’t read adverts, they read what they are interested in. With regards to this tip, I would always recommend trying and testing different adverts and different copy.
5. Lead conversion
No matter how many leads your business receives, if you’re not converting them, or if you are not focusing on getting the best conversion rate possible, then you are wasting money. The cost of ‘wasted’ leads is a direct costs to your profits.
If you get better lead conversion, you can either reduce your advertising costs, because you no longer need as many leads, or your business will grow faster by keeping the advertising level the same. By looking at each of your sales processes, and by looking for ways to improve each one, even by a small amount, will ultimately lead to an enormous improvement in overall sales results.
6. Average sale value
How much your customers spend on each visit, will impact your bottom line. You’ll find that by focusing on your average sale value, or average transaction value, this will have a massive impact on your bottom line. I always put this at the top of my 7 ways to grow a business.
7. Increase the number of times your customer visit
How many times do your customers visit your business over a 12-month period? A starting point is knowing or understanding the answer to this question.
If you find ways of attracting your customers back more often, this will have a significant impact on your bottom line. If you identify that this is the tip you to focus on, I would advise that you get together as a team and think about ways of getting your customers to return more often. This can be done in many ways, one of which would be to introduce incentives for them to return or to introduce new products or services.
Look at ways to up-sell to your customers. Don’t leave money on the table, as you will find that some customers always want to buy the biggest, the fastest, the best, the most exclusive etc. Think about people that buy Mercedes cars, which after all does the same thing as a cheaper vehicle, but some people prefer the class and sophistication of a German car.
9. Profit margins
Look at your profit margins on all of your products. It might be that your margins are too small, or it could even be that certain products are making a loss. This is something that is more difficult for manufacturing companies to work out, as there are more things to look at in order to decide whether an item is making a profit or not. However, having said that, if you are buying and selling products, make sure that you are making a profit on each one that you sell.
The only exception with this, is if you have chosen to run a ‘loss-leader’, in which case it might be acceptable to sell something at a loss.
10. Cost of sales
Focusing on your cost of sales, or the costs and expenses you incur which are directly related to making sales, can make a significant impact to your profits. One way to do this is to look at your suppliers and how much they charge you. This can be addressed in one of two ways. Firstly, you can approach your existing suppliers and ask them to ‘sharpen their pencil’ and reduce what they charge you. Secondly, you could look around for a supplier that is willing or able to supply the material or product at a cheaper rate. However, always make sure you focus on quality and delivery at the same time, as you don’t want to slip on either of these.
11. Price increases
I know from experience, that business owners always flinch at the thought of increasing their prices, but sometimes this isn’t as bad as you think. As with any business change, having the knowledge is the key to making any change, which is where our free Price Increase Calculator Tool will help.
If you are able to increase your prices, without losing customers, this will go straight to your bottom line. I recommend you take a look at our tool (it’s free after all). Our free business tool will show you how many customers you could lose after a price increase, and be no worse off.
I would suggest, and this will depend on your industry and the competition you have, that smaller increases of between 5-10% can be tolerated by your customers.This is especially true if your customer service is great, and your products or services are of good quality.
12. Promises and timing
The saying ‘Under promise and over deliver‘ is a good saying to follow, and what you don’t want to be doing is ‘over promising and under delivering‘. One of the top reasons for annoying customers is not delivering on time. Failing to be on time is your quickest way to the loss of customers, which in the end will become a huge cost to your business.
13. Advertising and cost of customer acquisition
In some businesses the advertising and marketing budget can be one of the highest ‘below the line‘ costs. Reviewing this on a regular basis, is key to keeping it as low as possible. For example, instead of just placing adverts in magazines, you might want to consider writing articles or trying to seek other ways of getting some free publicity. The key here is to be creative and to focus on the cost of acquisition of each lead, and target ways to reduce this.
By managing the data and understanding your lead acquisition cost, you are then able to focus on this make the necessary changes. This is a very useful key performance indicator (see below) to adopt and track.
14. Review your costs and expenses.
Never accept that just because either you have an expense that you need it, or because you’ve always done something a certain way that it has to be that way. Also, as with cost of sales, review your overhead expenses and the suppliers you use. Work out ways you could get things cheaper for the same or for better quality.
15. Change your product mix
By looking at the mix of the products you sell will have an impact on your bottom line. This might mean you stop selling low margin items, and/or introduce the selling of high-margin items. This sort of analysis does require that you have a good accounting system in place though. You could try bundling your products together too, as this can encourage customers to spend more with you, whilst at the same time having a positive effect on your profits.
16. Reduce your stock levels
Holding stock costs money, which is three-fold. Firstly, to hold stock you need an area to store it, which costs money…so the more stock you hold, the bigger the area needed to store it, and therefore the higher the costs. The second cost associated with stock, especially if you hold large levels of stock, particularly with items that are slow moving, you could end up being left with obsolete stock, which can then only be sold at a reduced amount. Companies that sell perishable goods need to pay particular attention to this, which includes restaurants. You want to make sure that you only keep stock to a level that will satisfy your immediate sales needs.
Finally, the other cost associated with holding stock is the ‘cost of money’. Money tied up in stock is costly and you could be getting a better return on your money else where. This is especially true if you are a business that is seeking finance, what you don’t want to do is to raise finance to end up ‘over-stocking’ your business, because this will definitely reduce your profits, through the cost of additional interest payments.
17. Look at your competition
Keeping an eye on what your competition is doing, can have an impact on your business. This is one of those tips which is on the periphery of increasing your profits, but I can justify this by way of an example. Let’s say that your competition introduced a new or better product or service, that you could have done, but you don’t. You may find that you begin to lose your hold on customers. This may be the case no matter how good your customer service levels are, especially if this new product is far superior to what you already sell.
18. Introduce unique products or services
Having products that are unique to you, will allow you to have higher profit margins, as there will be little or no competition in the market. The cost of developing new products, especially if this involves inventing brand new products, can be extremely high. However, you may want to consider doing some R & D, as in the UK the Government provides for some very good tax breaks for doing research and development (see below about being tax efficient). The classic example of this is Dyson, it could be worth your while looking at his story.
19. Unique selling proposition (USP)
Does your business have a unique selling proposition or USP? If you don’t, then I suggest you take a look at developing one, so that you can better ‘sell’ yourself to your existing customer base, to help prevent them leaving. Plus you can then promote your business to new prospects in a much stronger way. It might be that you already have a great USP, but you are not communicating this very well, but if you did, this might impact on your lead conversion.
By focusing on your USP, will help you to really think about what your business is all about. This will help you to move your business forward in the right direction. This will also help you to develop and grow your business, based upon a good solid foundation.
Do you give away discounts? This can have an impact both ways. If you do give away discounts, either at the selling stage or at the point of payment, this will impact on your profits. You might want to take a look at the discounts you are giving and see if these are necessary or not, and/or review the levels of the discount you are giving.
However, if you aren’t already giving away discounts, you may wish to introduce them, which in themselves may encourage sales, which you might ordinarily not have got. Again, this is about testing an monitoring the results.
21. Sales and promotions
Some businesses use sales to encourage people to shop. It is difficult to walk down any high street these days without seeing at least one sale or two, or three! There are pros and cons of a sale, with the obvious con, it does impact on your bottom line, as you are taking less for your products. However, sometimes it is necessary to get rid of old stock, in readiness for new lines. This point ties in with the tip on reduced stock levels, as you don’t want to be giving away too many items in your sale. The other con to a sale is that if you always run a January sale for example, your customer may hold back from buying from you in the months leading up to your usual sales month. This will not only affect your sales in the prior months, it will affect you profits, and it will impact on your cash flows too.
22. Customer payment terms
Keep an eye on your customer payment terms and review these. For example, if you presently offer what I would call a long-term payment period of over 30 days, say 60 days, you may want to look at reducing this. You’ll be surprised at, by changing the timing on when your customers pay you, how this will impact your profits.
Because of this, I developed our Cash Flow Improvement Tool, which is a free business tool to help you focus in on your cash inflows and your cash outflows of your business. Please feel free to take a look, it’s free after all.
23. Credit control
Bad debts can be a significant cost to a business, and can seriously affect cash flow. This sometimes has a double whammy, as for one you lose the cash flow associated with the amount the customer owed you, when they went bust…which impacts on your bottom line straight away. But also, you’ve lost a future customer and the sales associated with that customer.
Make sure you keep on top of your credit control function, which includes setting realistic credit levels for your customers. It also includes where necessary carrying out credit checks before you offer them credit terms. You can take out credit insurance, which is a cost to the business, but this will cover you in the event of a bad debt.
24. Introduce other payment methods
Having multiple methods of payment can increase your sales. If at present for example, you don’t take credit card payments, you may be losing out on a whole batch of clients. The other type of customer payment method you could introduce, depending on what you sell, is finance options. You could introduce zero percent finance or indeed finance that costs.
The beauty of introducing other methods of paying, is that you are able to sell to people that may not ordinarily have the cash in their bank to afford to buy what you are selling. This type of payment method is usually applicable to larger ticket items, like cars and home furniture. By introducing finance options you are not only opening up the scope of customers that can now afford your products, but more importantly, if your competition is not offering this type of payment method, you are going to gain customers that they cannot get.
25. Supplier payment terms
The length of time your suppliers allow you to pay for your goods and services, will have an impact on your profits. For example, if at present your business has little or no credit terms with its suppliers, you may find that you have to raise finance either from a bank or an investor. Raising finance isn’t cheap, so this will be a cost against your profits. However, obtaining ‘finance’ from your suppliers is usually free, so if you can use supplier finance instead, this will save your business money, and this will go straight to your bottom line.
Our free business tool Cash Flow Improvement Tool, takes this aspect into account also.
26. Taking advantage of discounts
Your suppliers, or perhaps new suppliers may offer you discounts, either at the point of sale or at the point of payment. Discounts may come in the form of bulk buying discounts, which if this works for your business, I suggest you look at it seriously, as this will definitely impact on your profits. However, do bear in mind the tip on looking at your stock levels, as you don’t want to carry stock levels that are either too high, which begins to cost you more than the discount, or if the items you order are going to become obsolete or perish, if they are perishable,
27. Secret shopping
Using secret shopping, either on your our business or on your competition, will give you some important insights both into your own business and how you are doing, but also how you could improve things. If you picked up on something your competition is doing that you are not, this could be priceless information. By secret shopping yourself, you will be able to focus more on your customer service levels, and see where things are going wrong.
If you use an outside company to do this exercise, you’ll be able to get advice from them, of where you are perhaps going wrong, or what improvements you could make. With the idea being to always improve your customer experience, which will lead to happier contented customers. Happy customers will become advocates and provide you with great testimonials, but also recommend other customers.
You might even want to let your sales team know that they will be ‘secret shopped’, as this in itself will make them focus more on customer service, as they will not know whether the customer in-front of them is a secret shopper or not.
You can sometimes pick up on key things by secret shopping your competition. I remember doing this in one of my businesses, and the competition were constantly slating my business by saying that the only reason we had a 2-year guarantee was because we use inferior materials. As it happens our materials were of the same quality as theirs, with most coming from similar or the same companies. However, this scare tactic might have been working with some potential customers, so as a result of finding this out, we changed our guarantee to 10 years, which countered what they were saying.
28. Complimentary products
It’s a good idea to introduce products that compliment those that you already sell. An example of where this works well is say in a fitted furniture business, whereby the business might introduce carpets sales. In many cases, customers have new carpet after they’ve had their furniture fitted, which would give the furniture business a foot in the door already. People are more likely to purchase from a company that they’ve already bought from, than a totally new company. The back-stop to selling carpet themselves, would be to join forces with a company that already fits carpet. This introduces the concept of cross-marketing….
29. Cross-marketing with complimentary products or services
Cross-marketing is where you work together with another company, whereby their products or services compliment yours. This is one step back from you introducing these products or services to your business yourself. This can work well for you and for the other business, and you can be very creative with your promotions and offers. You can also save money too, and where this works well, is by working together on advertising and marketing. You can share these costs between you, by producing a joint brochure or by paying for an advert between you, thereby saving some money.
Where you can also benefit immensely with this tip, is where the other company is happy to promote your business to customers sat on their database. This is really powerful for you, and is a cheaper way for you to access a group of customers that might ordinarily cost a whole lot more to acquire. This works particularly well where the customers you and your co-marketing business have, are similar to those of the other company, and where they are likely to buy your product in addition to that of the other company.
30. Affiliates and affiliate programs
Introducing an affiliate program to your business means that you are getting others to do the selling for you. I suggest that you establish your own way of selling and make sure you already have a know market for your products before you begin with affiliate marketing. But this is a great way of getting your message out there and to sell your products, especially on the Internet.
31. Sales training
Keeping your sales force trained to a high level, is key to getting good conversions from your sales team. Making sure they are top of their game, with the latest techniques is critical. Keeping up to date with your training, and not just with your sales team, is a good way of keeping a motivated and happy team.
32. Commissions and incentives
Changing how you incentivise your sales team will have an impact on how well they sell. Offering higher commissions for achieving better results will encourage them to sell more. However, make sure that you keep an eye on this, as you want to make sure you sell ethically and that your company doesn’t become too pushy. Having a smaller team that sells well, will mean you can reduce your sales team and thereby reduce your costs. Each new sales-team member, depending on the way you sell, will attract certain costs, especially if they require cars, iPad’s, plus other selling tools.
33. Encourage your staff and having a good working environment
Good HR and keeping your staff happy, will lead to them staying with you for longer, and will ultimately reduce your costs. Having staff leave all the time and having to replace them is costly. There are recruitment costs, training costs, but more importantly, if you lose good staff, this will have a huge impact on your business. And remember, they may well go to the competition, which will have wider implications. So review your staff defection rates, and introduce a staff exit interview, in order to find out why staff are leaving. This way, you can do something about it.
34. Client advisory board
A client advisory board is where you get a few of your clients together to ask them about your products and/or services. The idea is to have them help you to improve upon your customer service and to ask them for their advice on what products and/or services you should sell in addition to what you already sell. This can work really well for increasing your sales and therefore your profits.
Why client advisory boards are so good, is that they also shows your customers that you really care about what they think about your business. Notably, at the last client advisory board I ran for one of my businesses, the clients attending it actually agreed that I could raise my prices. With this information alone from one client advisory board, I increased my profits.
35. Counter-cyclical products
There are certain industries and businesses that have a cyclical nature to them. However, if you look carefully at this problem, it might be possible to counter this by introducing new products or services that sell at different times to those that sell at other times. The importance of this is to make sure you have sales throughout the year, which cover your running costs, to make sure you make a profit in every month, rather than the majority.
36. Brain storming sessions
If you have a team around you in your business, using the power of a brain storming session on any of these tips and ideas will prove to be extremely powerful. The power of brain storming is that each idea can feed of another one, and before you know it, you have a brilliant new idea or improvement, that could be the next big thing and increase your profits no end.
In themselves, brain storming sessions will not increase your bottom line, however, the activity and the outcome it could provide, may do.
37. Customer defection rate
It is important that you track your customer defection rate, which could be higher than you think, especially if you’ve not reviewed this before. By knowing what your customer defection rate is, you are able to do something about it, and in this tip I will make reference to the saying ‘What you measure you will manage.’ Where possible, I suggest you make contact with those customers that have left you, and ask them for reasons why. This in itself can sometimes win a customer back, as they realise that you actually care. You can then make the necessary changes and improve your business to avoid this happening again.
38. Pareto Effect or the 80/20 rule
Focusing on the 80/20 rule can make a big difference to your business. I will use an example to explain how this worked for me. I did an analysis of a previous business I owned, and it worked out that 20% of my clients were providing around 80% of the revenue. This meant that I could be quite daring and raise the prices of the 80% of clients that produced only 20% of my revenues. Interestingly enough though, I only lost a very few clients from the 80% and as a result, my business was much more profitable.
39. Productise your services
If you are a business in the service industry, and at present you charge by the hour, I recommend looking at productising your services. This actually means that instead of simply charging by the hour for everything, you charge a fixed price for certain services. I made this change when I ran my own Chartered Accounting practice and it made my charging structure much clearer to my clients.
This change in itself may or may not increase your business profits, but it might attract certain customers that are looking to fix their costs. The benefit to the client is that instead of them taking the risk of agreeing to pay for however many hours it takes to complete a task, instead they know upfront how much it’s going to cost. It’s a bit like getting onto an flight, when you book it you know upfront how much it’s going to cost, and you choose the level of service you want…economy, business or first class. You then pay accordingly.
By making this change to your business and by productising your services, you are transferring the responsibility of the risk of how long it takes to complete any given task. Your focus then changes to ensure that you are efficient in what you do, which is good for your business, which could lead to higher profit margins.
It could also mean that you make even more money, by fixing the price at a level that the customer is happy with, but if you are able to complete the task faster than before, your profit margin will be higher. This way everyone wins. By making this change, can sometimes allow you to push the work down to the lowest common denominator, which will lead on to additional profits. However, you must keep an eye on making sure the ‘output’ is not compromised.
40. Increase staff productivity
If you improve your staff’s productivity, by either keeping an eye on them, better training, or by using staff performance reviews, you will either be able to produce more with the same level of staff, or alternatively you’ll be able to sell more with less staff. Either way you will increase your bottom line. I therefore recommend you carry out regular staff appraisals, and use these to set targets and review their performance against the targets you set.
41. Change the work-flow of your factory
If you look at any factory set up, the more efficient the flow of work through the factory, the more money the factory will make. This is simple maths, because the less time required to complete any given task, or a reduced time to take an item from point A to point B, will mean you need less staff, which means lower costs. Or turning this on its head, with the same amounts of staff, you’ll be able to produce so much more, which allows for higher sales, and therefore higher gross profit margins and an improved bottom line.
42. Get rid of awkward customers
We all have those difficult customers to deal with, and they always want either more for less, or they are never happy with anything that we do. You can even offer to fly to the moon and back, and they’ll still find fault with something, and really all they were after in the end, was some form of discount or money off. You are better off getting rid of customers like this, as they end up taking up more time and therefore costing you more money.
As already mentioned, what will end up happening, you’ll either not be paid at all for what you’ve done, you’ll take money off, or you’ll offer them some other form of compensation. Which is why you are better off without them in the first place, as more than likely they will also take pleasure in slating your company across the internet too.
43. Sack your poor performing clients
Making reference to the 80/20 rule again, you might want to review what it takes to service your clients. You may find that when you look at the Pareto Effect, or the 80/20 rule, that 80% of your time is spent working on just 20% of the results. This could lead you to decide on getting rid of, or sacking those clients representing the 20% of revenues, which will free up your time to finds more of the more profitable clients.
44. Find free sources of advertising
Free sources of advertising or free leads is something we all want. Writing articles for magazines works, or articles for blogs posted on niches connected to your business. Going onto the radio is another good way to promote your business for free, which is something that I’ve done a few times. If you look at the Internet too, there are two forms of website traffic…paid-for traffic in the form of pay per click, versus natural traffic as a result of good search engine optimisation or SEO. Of course you could argue that SEO is not free, as it costs time and sometimes money to do, but ordinarily, once you have a page at the top of the rankings, it will usually stay there and then produce ‘free’ traffic thereafter.
45. Sack destructive or disruptive staff
We all know the old saying about a ‘bad apple’, believe you me, you are better off getting rid of a bad apple when it comes to staff. At one point in one of my businesses I had a guy that was shear poison, and once he had left, the whole place was so much nicer. A number of staff left as a result of his behaviour, which in itself cost the company hugely, so this is a lesson I don’t want you to learn the hard way. If you identify a member of staff like this, you are better off getting rid of them as soon as possible. However, I always recommend that you follow the proper HR code when sacking staff.
46. Introduce tracking systems on vehicles
When I introduced tracking devices on my vehicles, this saved more money than it cost to install and run the devices. This was for two reasons…the first was that we were able to stop the staff from doing private jobs or them using the vehicles in their own time. Secondly, we were then able to see how fast the vehicles were going, and where staff were going too fast, we were able to put a stop to it, which improved fuel efficiency and reduced our fuel bill.
47. Introduce speed limiters on vehicles
By limiting how fast a vehicle can go, will significantly improve the engine’s efficiency, whilst at the same time saving you huge amounts in fuel costs. If you do the maths on this…let’s say we reduce the miles per hour from say 70 down to 60 on a larger vehicle, like a van. On a journey of say 20 miles, at 70 miles per hour this would take 17 minutes. Whereas at 60 miles per hour it would take 20 minutes. However, according to the AA, this will save you up to 9% in fuel, which is a huge percentage saving. This saving changes to 15% if you reduce your speed still further to 50 miles per hour.
I will leave it up to you to work out the numbers on your annual fuel bill, of how this could impact on your profits if you obtained either a 9% or a 15% saving, and what this would mean to your bottom line.
48. Buy more fuel efficient or dual fuel vehicles.
These days there are more and more Eco-cars and you can save significant amounts on your annual fuel bill by purchasing these fuel efficient vehicles. They do however, cost more to purchase, so you do need to weigh up the annual savings against the capital outlay. However, this is certainly worth doing for the purposes of improving your bottom line, plus it will make you a greener company at the sames time. This is something that some customers look for in a company, so you’ll get a double hit with implementing this tip into your business.
49. Introduce CCTV
In one of my businesses I was a victim of staff stealing from me, and had I only installed CCTV, this would have prevented this. I would recommend introducing this to watch on your own staff, but also, if you run a retail outfit, this will help to guard against customer theft too.
50. Find new markets
Finding new markets should increase your customer base, thereby growing your business and in turn increasing your profits. New markets could include expanding your area of operation from locally to nationally, or from nationally to international. There are big implications for both steps here, but both are worth considering, if you want to grow your business and increase your profits. A bit of market research here wouldn’t go a miss, and you might find you can get the help of the government where you are looking to expand overseas.
51. Retail displays and product positioning
Larger businesses, including supermarkets and the big retail chains spend thousands on product positioning and the flow of their stores. So never underestimate the power of where you position your products in your stores over how this will impact on your sales. For example, if you make it easy for customers to buy from you, it is more likely they are going to spend more with you, thereby increasing your average transaction value in the process.
52. Being tax efficient
Making sure you get the best tax advice is also key to maximising your business profits. For example, in the UK your spending on research and development (R&D) carries very good tax breaks, and I’m sure this will apply in other countries across the world. I’d be surprised if America don’t have similar rules for R&D expenditure. It might be that you are already spending on R & D, but not claiming the tax reliefs you are entitled to, as getting this right can have a significant impact on your bottom line. I’m sure there are other examples of tax breaks that you can take advantage of, to legitimately minimise your business taxes. There are companies that balance their R & D expenditure, so that they never pay any tax on their profits, by making the right claims.
53. Key performance indicators (KPI’s)
Identifying your important key performance indicators or KPI’s is something that can help you to really focus in on the right metrics that affect your business in key areas. So I suggest you spend some time working out what your best KPI’s are for your business, then spend more time monitoring and managing these. By monitoring your key performance indicators, you’ll know what effect the changes you are making to your business is having, either good or bad. Please also note, that KPI’s don’t always have to be revenue focused, they can also focus on things like staff defection rates too.
I would hope that you don’t just read this article, as that will have no effect at all and will make make no difference to your business. The only way in which you will increase your profits is to take action, even if it is to select a few of the best tips from this article.
So please take action today, and I’d love to hear from you if you made a difference in your business, by implementing just one or more of my tips here.
Prioritising your strategies is important, as you want to focus on those things that have the better impact on your bottom line. I would also suggest you look at getting those ‘quick wins’ in first. As a final point, I would also recommend that you take a look at our Increase Profit Software, as this will help you to target the best metric for your business.
Financial success and growing your business is incremental and is affected by continuous improvement in all of areas of your business, so by continually improving things, you’ll make more money.
As always thank you for taking the time to read my blog and if you like what you’ve read, please share it with others.