5 ways to Increase the Profit in your Business

5 ways to Increase the Profit in your Business

 

Would you like to make more money from your business?

 

I bet you would!

 

In fact, one of the main reasons that most people go into business is to make more money. Now, you may be thinking “I don’t want more money, I want more time”, but if you are making more money, you can pay someone to do the things that your currently do, meaning that you will spend less time working and more time doing the things you want to do. As they say, “Money isn't everything, but it’s up there with oxygen!”

 

So, here are my 5 top tips on how you can increase your profit in your business. They are actually really quite simple and if done properly, they will make a huge positive impact to your bottom line.

 

1. Increase your prices

 

When was the last time you put your prices up? Increasing your prices will increase your profits immediately.

 

If you’re worried about increasing your prices, please remember that most of your customers will accept a price increase providing you give them a good reason. The ones that don’t, well they probably aren't your best customers anyway. You may find that the customers you lose are the ones who take the most of your time and effort, want everything done yesterday and cause you the most stress. If you ever heard of the Pareto Principle, also known 80-20 rule, you will know what I mean. Most businesses get 80% of their business from 20% of their customers.

 

There are many reasons why customers buy from you, and price is only one of them. For example your customers have a good relationship with you, they like the service you provide or you are in a convenient location. Some customers simply can’t be bothered shopping around to find someone cheaper. Depending on your industry and the amount of your increase, some people will not even notice you have changed the price!

 

2. Negotiate with suppliers

 

The second thing is to negotiate with suppliers. If you are buying stock or using contractors, negotiate to get their rates down once again will increases your gross profit. Increasing your gross profit is going to increase your net profit and it’s going to mean that at the end of the day, there is more money left over to go into your back pocket.

 

3. Sell more higher margin goods

 

What I'm talking about is selling products/services that have a higher gross profit margin. For example; if you've got some products that you buy for $50 each and you sell them for $70, you will make you $20 profit. If you've got some products that you buy for $50 and sell for $100, you will make you $50 profit. So, it makes sense sell more of the $100 product, rather than the $70 product, because you’re going to make more profit.

 

One great way to ensure you sell more of your higher margin products is to give your sales people an incentive to sell them, i.e. you might like to reward them with a team outing at the end of the month of give them gift vouchers. You can also encourage your customers to buy these products by emphasising the added value they will receive by buying a better quality product.

 

4. Reduce fixed costs

 

Reducing your fixed costs can be quite tricky, however, in every business there is always room for improvement. First, analyse your existing costs, then put a budget together and ensure that someone is accountable to the budget. Ensure that expenses over a certain amount are approved by the individual’s manager so you don’t incur large expenses that you are unaware of.

 

Also put some sort of control on your fixed expenses, and make sure you are reducing them as much as you can. Whatever you save ends up in your back pocket.

 

5. Increase your sales

 

In a many circumstances, there are businesses that could increase their sales without increasing the cost of delivering sales. If you are doing $100,000 a month, it’s quite possible that you could do $120,000 a month before you have to hire another person, get a bigger premises, buy another van or a new piece of equipment. If you've got the resources, make sure you are utilising them to their full potential. Maximise your capacity because then you’re going to maximize your profitability.

 

In conclusion

 

There are many other things you can do to become more efficient and make more money in your business. I've just touched on these 5 things because I believe they are the most important areas you can start working on today that will put more money in your pocket.

1 Star2 Stars3 Stars4 Stars5 Stars (No Ratings Yet)
Loading...

Leave a Reply

Your email address will not be published. Required fields are marked *

Top Rated Articles

How your company can adapt to the Digital Revolution

Over the last couple of years, technological innovation has brought about a rapid change in the customer service landsca

LEARN MORE

Will Marketing Automation Help Your Business Grow?

Marketing automation software can benefit your business in a number of ways. It is a great way to increase traffic, enco

LEARN MORE

How CRM Can Maximize Customer Lifetime Value (CLV)

"Keep your customers always on the frontline," this is a key philosophy to running a successful business. Customers are

LEARN MORE

Recently Viewed

4 Effective Tips to Improve the Customer Service Quotient of Your Company

Any person who runs a business knows exactly how important their customers are - they are no less than the backbone of y

LEARN MORE

7 Effective Ways to Use Technology in Your Small Business

With almost 30 million small businesses making up the majority of the US business scene (roughly 99% of it, actually), i

LEARN MORE

5 ways to Increase the Profit in your Business

  Would you like to make more money from your business?   I bet you would!   In fact, one of the m

LEARN MORE
  • Over the past 6 months the incredible team at MMP have supported us to shift our attitude towards our business & month on month our revenue is increasing to the point we will be able to employ additional staff to support our business goals long into the future. Do not regret our decision one single bit!

    • Emma Reece

  • Working with my coach has enabled me to see the areas where my business is failing. This was pretty confronting to me to be honest. MMP has the tools to improve these areas and the guidance on how to implement them.

    • Sharon Robinson

  • I have been working with Max My Profit for approx 3 years now, and over that time I have learnt a lot of things about not only what it takes to run a business, but I have also learnt things about myself. I don't believe i'd be the person or have the business I have today if it wasn't for Max My Profit and our Business Excelerator. Great team to work with if you want to take your business serious!

    • Ben Choy

  • As a new client for Max My Profit (MMP) it has taken no time at all to realise the benefits of business coaching. Despite many years of senior management experience starting a new business requires best practice systems and processes built on a solid platform of detailed planning. I look forward to the benefits of adopting the formula being shared by MMP.

    • Campbell MacLeod

  • Max My Profit Are truly awesome at what they do. They have helped me over the past 12 months to get off the tools in my business and start working on my business. I am looking forward to 2019 with enthusiasm not concern. Thanks so much.

    • Aaron Kemp

  • If you are committed to Growth the Max My Profit Team has the tools and expertise to excelerate all areas of your life. They Care, They Listen, They Understand You as an Individual first then they focus on Your business. Thank you Max My Profit my rating is a 6/5 - Kindest Regards The Mr Handyfix Team

    • Catherine Kavadas

  • The team at Max My Profit are an absolute pleasure to deal with. I love working with a team who is on top of what they are doing and have a clear view of what they are working on with you and helping ensure you get to the end goal.

    • Lauren Watts

  • I have been working with MaxMyProfit over the years and what they do for SME's in growing their business is fantastic. Also due to there knowledge and their supporting material for companies across the 5 lifestyle stages and assisting them through this process day in day out is extremely comforting as a small business owner and have referred them many businesses over the years.

    • Steve Laingy

  • Working with a business coach from MaxMyProfit has been one of the best things I have done for my business. I had several other coaches before MaxMyProfit but these guys are a step above the others. I have seen a significant increase in sales, now have a business that can run itself and the coaching program has paid for itself many times over.

    • Matthew Kitchin

  • Much more than just business coaches. There is an absolute treasure chest of business knowledge in their members site.

    • Iain Campbell

  • Max My Profit are unique as they really partner with you to develop and implement a plan that will drive success for the business. I was hesitant to proceed as previous business coaches tell you what to do and rely on you to implement.

    • Michael de Haan

  • I attended one of Max My Profits introductory events in Melbourne. Having been an accountant for almost 30 years, I was somewhat sceptical. Boy was I wrong. I not only enjoyed the presentation, but I gleaned so much from just that session.

    • Daniel Odd

  • These guys are an absolute wealth of knowledge for Small Business. The programme and support networks they have set up ensure learn more every day and can take your business from good to great. Thanks so much.

    • John Butler