Want more profit in your business? Who doesn’t! Increasing your profit margins allows you to grow your bottom line and whilst it seems obvious, many business owners are often too busy to give it the attention it needs. Luckily for you, we’ve got 5 simple ways to get those margins up.
Increase your prices.
Whilst it might seem terrifying, this is the easiest way to add pure profit (especially if you haven’t done it in a while). Just make sure to give your customers a bit of notice, and also tell them why you’re making the change. It’s normal for a business to increase prices each year and if you have a history of providing a good service, customers are usually understanding.
Remove unprofitable products.
Go through your products or service and get rid of any that chew up a lot of time and resources. You might find yourself spending a lot of time in certain areas that don’t bring in a lot of profit (e.g a super time-intensive service or a product with a lot of operating costs). Whilst removing them might seem like you are losing revenue, you’re actually increasing your overall profitability and freeing up yourself to focus on other areas that have better margins.
Increase conversions.
A lot of people think they need more traffic and leads. But if you can improve your conversion rate, you can make more money without needing any boost in traffic. Review your sales process and spot the areas that can be improved like following up faster, improving your sales scripts, making your message more compelling, putting together some sales material with the main questions leads ask etc.
Create monthly recurring revenue.
A fantastic way to increase revenue and profit at the same time is by creating a subscription product or service. And by the way, this isn’t just for specific companies where a monthly subscription is super obvious (like a gym or a software company), it can be for anyone! Have a think about what you could offer customers on a monthly basis.
E.g a web designer could provide up to 3 hours of work each month for a small monthly fee. A personal trainer could send out a new recipe or workout plan each month. Just get creative! And if you want to set up a subscription product or recurring direct debit, click here for a tutorial on how to do it.
Get a better deal with suppliers.
Negotiate a better deal with suppliers so you can capture more profit. If they aren’t open to providing a better deal, you can also consider switching by looking at competitors. Pro tip — for discounted software products, check out AppSumo. They often have great lifetime deals available — e.g if you are paying monthly for Mailchimp ($20 - 50+ per month), you can snatch up alternative email providers for $50 - $150 lifetime. Steal!
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If you’d like to chat about saving money on transaction fees AND creating more recurring revenue in your business, chat with our team! Just click the button below and we’ll show you how our other clients are getting great results, and how you can too
