Five Strategies to Make More Money
Here are five key strategies to increase your business, and your profit. It’s best to build up by 10 percent using these methods, but the slow and steady approach will be worth the results.
1. Increase Your Leads
Grow your number of prospective customers. By interacting with more people, you’ll increase your chances of turning them into customers. Here’s a few tactics to increase leads and make more people aware of your business:
- Document your most successful promotional tactics. Repeat those successes by putting more budget and effort into those marketing strategies.
- Profile your target audience and contact them directly.
- Attend industry events and conferences to meet potential customers.
- Redesign your website to increase opportunities outside the Islands.
- Develop new distribution channels. Think about using agents, licensing your goods or utilizing new distributors.
- Ask current clients to give you referrals.
- Use search engine marketing and buy AdWords.
- Run webinars or speak at local events.
2. Convert Leads Into Customers
Once you have more leads, increase your conversion rate by making them your customers. Even converting 10 percent more into customers will generate significant sales.
Measure your current conversion rate. For example, calculate the number of unique users visiting your website divided by the number of your online sales and then consider the following:
- Organize local staff training on selling techniques and closing methods.
- Provide your staff with incentives or bonuses for higher conversion rates.
- Run demonstrations for potential customers to see what you can offer them, how they can benefit and then sign them up.
- Ask people to connect by creating calls to action or incentives through promotional materials, your website, blogs, social media and free trial offers.
- Create whitepapers or research content to encourage people to register or download content for you to then follow up and close the sale.
3. Increase the Number of Items You Sell
If you can entice your customers to buy another item, hour or extra service from your business, your sales—and your profits—will increase. On-selling is a classic tactic to improve your profit. They include:
- Add impulse or lower-cost products at your checkout or offer a final sell when closing.
- Ask customers what else they would be interested in buying from you and then widen your product range to accommodate their needs.
- Bundle your products together.
- Offer complementary services.
- Research your competitors to find new product or service opportunities.
- If you sell products, add a provided service; if you provide services, add products to sell.
4. Increase Your Average Sale
If you can increase the average value of each sale, you’ll directly improve your profit. Here’s what you can try:
- List all your highest margin products and services. Check that they are profiled on your website, that they have the most promotional budget allocated to selling, and that they are the first products to be sold.
- Ensure all employees know to sell those products with the highest average sale price, and that there are incentives when they sell.
- Increase prices. Even small improvements, such as one to five percent, will show direct profit results.
- Introduce new premium products or services that have a higher value.
5. Increase Net Profit Percentage
Net profit can be improved by looking carefully at your gross and net margins. To increase net profit, try these tactics:
- Review all of your main suppliers and determine if you can swap any for lower-cost providers. Ensure any new supplier can match the quality and service you expect..
- Assess if there’s any parts of your business that can be sub-contracted out to lower-cost suppliers, or can be imported from more affordable producing countries. Make certain this tactic won’t impact what your customers expect. (For example, Hawaii-made versus imported).
- Identify your top five overhead costs to explore savings. Overheads such as insurance, office supplies, internet, subscriptions and communications often reduce in price year by year. Make sure you’re getting these reductions.
- Trim employee costs, if possible. Review job descriptions to find any overlap; you may be able to get by with fewer people on the payroll.
There are several simple, practical steps you can implement to improve your business’ profitability. Review these five strategies to increase your profits at least once a year. Repeat any strategy you find to be successful.
- Contact one of our friendly American Savings Bank Business Relationship Managers to see how we can help your Hawaii business grow.
- Meet with your employees, accountant and any other advisors to brainstorm additional tactics to increase profits.
- Ask your employees to contribute ideas to sell more and spend less.
- Monitor your main competitors to see what they are doing to increase sales, reduce costs and improve profits.
- Keep up to date with industry trends and look to adopt any new ideas or technologies that will lower your costs and improve your profit margin.
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