When you run your business, one of the primary goals should be to increase your business profit.
After all, what good is a for-profit company if it isn’t making adequate profits? And, beyond that, what really does adequate profits mean?
Essentially, you could say it means making sure your profits this year are better than last year’s. In that way, you need to find ways to either increase your revenues or decrease your expenses (as profits = revenues – expenses).
In today’s post, we’ll look at the 3 best ways that you can make sure to increase your business profit, starting today.
#1 Increase prices
If you want to raise your business profit, you should first take a look at your pricing strategy. No matter what your goods or services are, they shouldn’t have the same price points year after year.
It’s a good practice to institute a yearly (or half-yearly) price increase. That will help you take care of the profit problem, as well as fight off any losses from natural inflation.
When you raise your prices, be sure to do it incrementally. Not by 50%, but instead by about 5% or lower.
That way, you won’t scare off your customers, but you’ll still get a respectable increase in your profit.
#2 Get lower expenses from suppliers
Another thing you must do is make sure that the prices your suppliers are charging you are the best prices.
Not best prices for them, but best prices for you. You should ask them simply and straightforwardly whether or not the current price is the best they can do.
After that, or at the same time, shop around and see what other suppliers can do for you. Then go back to your current supplier and inform them of a lower price from one of their competitors.
They should be able to find you a better price.
#3 Find and motivate or remove ineffective staff
This one may not go over very well, especially if you’re new to business or hoping to take your whole team up with you.
However, it is always important to trim the fat. Who are the people helping you the most in your business? They should be easy to identify.
And it should also be easy to identify those who are not really pulling their weight.
Your first step should be to work with the less-effective, to try to train and motivate them to be better, faster, stronger.
If that doesn’t work, however, you should start looking at whether they have a future in your business. You should also consider whether the cost of losing them (and the search for the next hire) can be offset by the value that the new person can bring.
It’s a difficult decision, but many business decisions are difficult. That’s why the popular saying is, “It’s not personal, just business.”
Increase your business profit today
By following these three crucial steps, you can definitely boost your business’ profitability. With better profits, you’ll see your business expanding and growing and you heading faster towards your goals.