6 Ways to Increase Your Business Profits
Track operations to boost your bottom line.
Most business owners would welcome a roadmap to greater financial success. While nothing is guaranteed, entrepreneurs who strategically track profit and marketing activities invariably navigate their business operations toward reduced expenses and bountiful bottom lines.
“There’s this saying, ‘What gets measured gets improved,’” explains Charles Gaudet, founder and CEO of Predictable Profits, a consulting firm that offers advanced marketing techniques to entrepreneurs who are passionate about expanding their small businesses.
Gaudet compares tracking a business’s growth to a pilot’s duties during flight. He says that prosperous companies must diligently handle operations through their own “business dashboard.” This ensures that your business is going in the right direction and that your metrics align with current business goals.
Ready to navigate your business to a more profitable future? Gaudet offers these six operational moves to increase profits and reduce expenses.
Operational Move 1: Track business metrics with technology. A failure to measure progress is perhaps one of the biggest mistakes that I see preventing most companies from growing or reaching the potential that they should reach,” says Gaudet.
Tracking profit growth rates per year is standard. However, Gaudet cites midyear and quarterly evaluations as wise tools to determine if a business is on course for annual goals.
One tool is CallTrackingMetrics, which provides each marketing ad with a unique phone number. Whenever an ad’s phone number is called, it is tracked – indicating the number of calls and subsequent customers generated from that ad.
For online activity, check out Google Analytics, a free way to track online business activities.
Operational Move 2: Increase profit centers. Small businesses typically rely on one or two profit centers – systems that function within a company for the sake of increasing sales and profits. An example is a company using direct mail and Internet advertising to attract sales. However, Gaudet explains that the most influential operational move toward more robust and predictable profits is adding one new profit center per quarter. This strategy generates more revenue streams while also challenging ever-changing economics, policies and competition.
Operational Move 3: Follow the 10 percent. More than 90 percent of small business owners, explains Gaudet, fail to calculate where their customers are coming from and why those customers prefer to do business with them. Financially savvy entrepreneurs can slash expenses by meticulously tracking the return on investment from each marketing initiative. This technique, he says, steers entrepreneurs toward targeting their investments in various marketing expenditures to a particular and profitable return.
Operational Move 4: Maximize on each sale. Implement business operations that not only fulfill financial goals, but create greater value for each of your client’s goals. When a product or service does not match a customer’s needs, the down sell technique can still generate a sale. “It’s easier for a customer to buy,” says Gaudet. “It’s the down sell…‘Oh, so you don’t want a dozen of these – maybe I could just sell you just one, for now.’”
Operational Move 5: Communicate one-on-one. Factor in customer loyalty, buying cycle trends, and personalized solutions when designing ads and directing messages versus a single communication for all customers. Helpful systemization and automation operations include e-mailed appointment reminders and responses to client-specific behaviors.
Operational Move 6: Put competitive pricing in perspective. Beyond pricing, learn what clients want to buy from your business. Then ask yourself the following question: “What needs to happen, in order for you to become the most expensive vendor in your market, and still have your customers lined up to do business with you?”
Operational moves that increase profits and cut expenses, says Gaudet, fall into three basic categories: 1) adding more customers using relevant profit centers; 2) tracking business with technology; and 3) creatively discovering ways to expand value, so that customers spend more money, more frequently and most importantly, with your business.
Want to learn more savvy business strategies? Take a look at our business resource center. And, one of the smartest business decisions you can make is being proactive about protection. Connect with an agent today to learn about customized coverage for your business.