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6 Tips to Increase Revenue for Your Business
Most business owners would welcome a roadmap to greater financial success and increased profitability. While nothing is guaranteed, entrepreneurs who use tracking metrics — comparing measurements of performance or processes — can better position their business for success. By strategically tracking profit and marketing activities, business leaders can navigate their 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. Charles heads a consulting firm that offers advanced marketing techniques to entrepreneurs who are passionate about creating profitable 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 plan is going in the right direction and that your metrics align with current business goals.
Ready to navigate more profitable business ideas? Gaudet offers these six tips to increase profits and reduce expenses.
How to Maximize Profit Margins
High profit margin businesses employ a variety of tactics to track, measure and improve. Turn your small profitable business ideas into a reality by following along as we walk through the following six tips.
Tip 1: Grow sales with technology
“A failure to measure progress is perhaps one of the biggest mistakes that I see. This mistake prevents most companies from growing or reaching the potential that they should reach,” says Gaudet.
Tracking profit growth rates per year is a standard approach to the question of how to increase profit margin. 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. This indicates 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, including social media.
Tip 2: Build profit centers on a quarterly basis
Small businesses typically rely on one or two profit centers. These are systems that function within a company for the sake of increasing sales to gain profits. An example is a company using direct mail and Internet advertising to attract sales.
However, Gaudet explains how to improve profit by adding one new profit center per quarter. This strategy generates more revenue streams while also challenging ever-changing economics, policies and competition.
Tip 3: Improve profitability by tracking market correctly
More than 90 percent of small business owners, explains Gaudet, fail to calculate where their customers are coming from. Financially savvy entrepreneurs can slash expenses — and increase profit margins — by meticulously tracking the return on investment from each marketing initiative. This technique, he says, steers the smart ten percent of entrepreneurs targeting their investments to a particular and profitable return by better understanding their customer base.
Tip 4: Maximize customer satisfaction on each sale
Shift your business focus so it not only meets your financial goals, but creates 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. "Oh, so you don’t want a dozen of these – maybe I could just sell you just one, for now.”
Tip 5: Communicate one-on-one
Factor in customer loyalty, buying cycle trends and personalized solutions when designing ads. Direct messages instead of using a single communication for all customers. Helpful systemization and automation operations include e-mailed appointment reminders and responses to client-specific behaviors.
Tip 6: Put competitive pricing in perspective
Beyond pricing, learn what clients want to buy from your business. How can you be the most expensive vendor and still have customers eager to do business with you?
Strategic business moves that increase business profits and cut expenses, says Gaudet, fall into three basic categories:
- Adding more customers using relevant profit centers
- Tracking business with technology
- Creatively discovering ways to expand value, so that customers spend more money, more frequently and most importantly, with your business.
Get the Business Insurance Your Company Needs
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.
This article is for informational purposes only and is available through different sources. This information does not, and is not intended to, constitute legal advice. You should contact your attorney for legal advice specific to your situation.