3 Ways a Small Business Can Increase Profit Without Increasing Cost
You must find ways to increase profit while keeping your cost low. You can start by taking stalk of your main profit drivers.
Operating a small business can be challenging, and without strong revenue base and profit margins it can be even more difficult. It is important to find ways to improve profitability and increase cash flow through a range of avenues. Although, advertising is the major way to bring in increased revenue. Advertising also adds to the cost of sales and does very little to increase profit margins.
You must find ways to increase profit while keeping your cost low. You can start by taking stalk of your main profit drivers. Once you have identified and analyzed your main profit drivers, you should develop a plan to grow them, without increasing costs.
Increasing profitability of your business involves looking at ways to grow revenue from sales as well as lowering your costs and looking at your business analytically to see where you can save money.
Here are 3 ways you can increase profitability while lowering your cost.
1. Increase productivity of current sales team
Recognize and reward top sales people with team performance reviews, and train your team on how to upsell and cross sell products so new and existing customers make multiple purchases at one time.
2. Offer VIP support
With this particular strategy, you do not have to increase your sales or customer support team. You simply have to identify the types of customers you have and form two to three main groups. Place the customers who spend more with you in a "VIP" group.
Reach out to your "VIP" customers and let them know that for a small monthly fee, they will have a dedicated support person who is there to answer any questions they may have. Let them know this person’s main job will be to support them, Hence the added fee.
3. Make your products subscription-based
You can make some products or services subscription-based. This works well with products or services that your customers buy on a regular basis. Have your customers join a subscription where they can pay a monthly fee to access the product they buy all the time as a package.
So let's say the average person spends $20 a month at your store buying similar item groups. What you want to do is to create a package where they can access that group of items for a lower monthly fee.
They will more than likely pay extra to buy some other stuff while in the store. Now you have the ability to go out and replace items in their basket/package with less expensive brands, therefore bringing your cost down.