Achieving continued business growth is never a simple process and often means overcoming challenges at every stage of the journey. After finding a solid customer base, the key to success in business lies in your ability to both improve your profit margin and steadily maintain this growth. This is by no means a simple task, but whether a business has been established for years or is only just starting out, there are always new techniques and strategies which could boost the bottom line. From managing your expenditure to collaborating with other businesses, here are five ways to improve your business’ bottom line.
1. Find New Customers
Although it may seem like an obvious statement, finding new customers and increasing your sales figures is the most straightforward way of improving profit margins. It’s not the only solution and is certainly easier said than done, but there are several ways to attract new customers.
If you have an established customer base and presence in a particular market, you may want to consider developing new products or services. Doing so could open up a whole new market and a set of potential customers. Of course, this may not be realistic for every business, and if this is the case for you, it may be better to focus on your advertising strategy. By choosing more effective and potentially lower cost advertising channels, you may be able to reach new customers who are more likely to buy from you. Modern marketing techniques enable businesses to be more focused than ever before, with greater access to data and buying habits.
When you have attracted new customers to buy from you, you should then be able to cross-sell or up-sell other products to ensure you maximize the potential value of each transaction. Never forget about your existing and previous customers as it’s often far easier and less costly to retain than it is to find new customers.
2. Sell Your Brand, Not Your Products
If done correctly, persuading a customer to buy a product is relatively simple. When a product is unique and useful, priced competitively, and is marketed to the right audience, achieving a successful transaction should be inevitable. However, any experienced business owner knows that this is by no means the end of the journey. If every customer you attract only ever makes one purchase, you will be chasing customers 24/7.
Your strategy should be centered on establishing customer loyalty and finding repeat purchasers, which will give your business a much stronger foundation. The digital nature of the world we live in offers customers more choice than ever before with hundreds (if not thousands) of brands competing for their attention every day. The result is that modern customers are buying into brands more than products. They need to agree with your brand’s vision, be confident in your ethics, and buy into the story you’re telling. Your company needs to have a clear identity and a purpose which is not just about selling products and making money. You can find out more about building a brand identity online.
3. Cut Unnecessary Spending
Improving a business’ bottom line is not all about increasing sales; it’s also crucial for managing your expenditure. It’s highly likely that your business will be spending unnecessary money in at least one area, but the trick is to find where you can realistically make cuts without damaging your ability to operate efficiently.
Take a close look at your budgets from both this year and last year to identify the biggest expenses. By establishing a closer understanding of your income and expenditure, you will be able to eliminate unnecessary costs. You may be surprised, for example, how much you spend on office supplies such as printer ink, paper, or other stationery. Consider becoming a paperless office, or finding a supplier with competitive prices, such as www.cartridgepeople.com.
A large expense is often paid to lease premises, but you may be able to reduce this by relocating to a cheaper area. Alternatively, examine your marketing budget and see which of your channels are generating sufficient ROI to be worth your time and money. If you’re wasting time and money on something which rarely generates sales, it may be time to stop or reduce the investment.
4. Establish Business Partnerships
Many businesses are now choosing to operate within what’s known as a business cluster. These partnerships can result in significant rewards for all those involved, including financial and collaborative benefits. For example, Silicon Valley in the San Francisco Bay is renowned for technological development and innovation with some of the biggest international companies operating from the area. By locating your business amongst others which work in a similar industry, it can provide opportunities to pool resources, skilled employees and enable the use of the same services such as supply chains or cleaning services. If your business premises are currently isolated, consider building a partnership or even sharing office space with another business.
5. Minimize Risk Wherever Possible
Modern businesses are exposed to risk in more ways than many people realize, particularly in terms of cybersecurity. Cybercriminals place companies in the firing line financially, operationally and reputationally through fraud, theft, and loss of data. It’s crucial to minimize the threats your business is exposed to by taking every measure to protect your business’ technology and online data from malware, phishing emails, viruses, and ransomware attacks.
Loss of sensitive data can not only be damaging to a business’ capacity to function; it can also lead to legal action from customers who have experienced a loss due to a company’s negligence. If your company is found to have inadequate data security procedures, you could be liable for significant fines.
To learn more about cybersecurity and the steps you can take to protect your business, take a look at What is Cyber Security? from computer security experts, Norton.
The physical security of your premises and any paper files you may have is also at risk from intruders, theft, damage, or loss. You need to ensure you have security systems in place to ensure only authorized personnel can enter the premises and that your data is backed up by either a cloud storage system or in an alternative location. Of course, some eventualities can’t be anticipated or prepared for, which is why adequate business insurance is an absolute necessity to limit your exposure.