Home
>
Small Business
>
Five Break-through Ideas to Immediately Increase Profits and Improve Cash Flow

Five Break-through Ideas to Immediately Increase Profits and Improve Cash Flow

Too often in business we get trapped into reviewing our sales numbers without analyzing the all important "profit" number. This is commonly referred to as the "bottom-line" of a business. There are various ways you can dramatically impact your profitability.

1) Under Pricing Kills Profits!

Many small businesses have thinner profit margins than larger firms do because they tend to under price their products or services. So why not just raise prices? I know the feeling--you're scared that your competition might swoop in like a bird of prey and your customer base might shrivel overnight!

If you have thought about raising prices but haven't done so, let me give you an example that may give you the confidence to do so. My client, Steve Lopes of Stanley Steemer based out of Edison, NJ had a positive experience from raising prices about a year back. After giving me much resistance to my advice to raise prices, Steve agreed it would be prudent to test it. The result? Sales and profit went up for the month in which he raised prices and Steve was pleasantly surprised at the little, if any resistance he got from his customers.

Since then, Steve has increased prices 2 more times. What happened to sales and net profits? Sales surged by 25% for that 12-month period and net profits for that same period skyrocketed by 84%. Since Steve's sales are in the 7 digits, these sales and net profit increases equate to very significant numbers. Best of all, it allows Steve with a lot of extra cash to do things he wanted to do in his business and personally.

Still unsure about raising prices? Remember, you can always cut them back. More likely then not, you'll be surprised at the positive impact it'll have on your business, assuming of course you continue to provide the same or better level of service to your customers.

2) Is The Marketing Working?

Make your advertising accountable.

You've probably heard the familiar maxim: "Twenty percent of my advertising brings in 80 percent of my business, but I don't know which 20 percent!" I see that as a common problem with many small-businesses. They don't track their marketing to know what's working, what's not. This problem stems from a bigger problem and that is not being aware of the difference between institutional and direct-response advertising.

Institutional advertising, also known as image advertising, is all about you, the business owner. How great you are, your qualifications, years in business, "full-service" product line, etc. It's the most common form of advertising. You see institutional ads every day in print or in TV. They're often cute, creative, funny, utterly ineffective and not trackable. Simply put, an institutional ad has no way to track results and is there to keep the company name in front of the public.

By contrast, direct response advertising is all about your customer and his or her needs. Its purpose is to stimulate a phone call, letter or a visit. Best of all, unlike an institutional ad, it is trackable so you can make every dollar you spend on it accountable. This then helps to measure the effectiveness of each ad.

3) The Easiest Way To Profits

Keep a lid on spending! Resist the urge to spend freely. You may like the way a lavish office and expensive furniture looks, but does it really contribute to your business? In some businesses, a fancy office is critical; in most it is not. I once had a small business owner who spent $5,000 on his front office desk in a business operation that had no "office visits." Needless, to say, this business owner did not survive too long in business due to this and other extravagances. Get as much value out of every transaction, whether you're leasing office space or stocking the kitchen.

Important caveat: Don't compromise when it comes to spending money on your own self-development. Small business owners don't give this enough importance and thus spend far too little money in this area. This is a big mistake. As an example, in the next 5 weeks, I'll be attending three conferences across the country and investing about $4,300 in seminar tuition fees, travel and boarding. Not a small chunk of change you would agree, but in my opinion, well worth the investment. You are the most important asset in your business. Take good care of you.

4) Have You Got A Back End For Every Sale?

Most small-businesses ignore the easy money to be made with a back-end sale. Yet, the really smart business owner never forgets that the most profitable words in the history of business were: "Would you like fries with that?" I have read that these words instantly doubled the total sale.

Your biggest expense is reaching a new customer. If you succeed to winning him over to the point that he pulls out his wallet and gives you money. . . he will often continue to give you money if you offer something else. Yet, you do not need any expensive advertising to do this ? he's already listening to you. You simply have to open your mouth and offer him something else.

Savvy small-business owners will have something more expensive to sell, and something less expensive. Something else that fits in with whatever the initial sale was. . . and something else that just has broad appeal. But they will always have something on the back-end.

5) Outsource Judiciously

One of the battle cries in business today is to determine the one thing that your business does best, become even better at it, and outsource absolutely everything else. There is certainly a lot to be said for taking a careful look at every function in your business and asking yourself if you should outsource it. But take a hard look at the numbers before you decide to jump on the outsource bandwagon!

Salim Omar, CPA is the author of the newly published book, Straight Talk About Small Business Success In New Jersey now available in Barnes and Noble bookstores and on amazon.com.

More free information can be accessed on his website amazon.com

Bridgeview travel from Midway .. Lockport Chicago limo O’Hare

In The News:

Tech expert Kurt “CyberGuy" Knutsson says unsubscribing from spam might actually backfire. Learn when to avoid it and stop junk effectively.

Tech expert Kurt “CyberGuy" Knutsson talks about how the first nonstop beating heart transplant, called zero ischemic time, at Taiwan hospital changes surgery.

Kurt “CyberGuy" Knutsson: FBI warns of "time-traveling" hackers.

Kurt “CyberGuy" Knutsson talks about a soft, vine-like robot called SPROUT that aids safe survivor rescues in collapsed buildings.

Health insurance giant Blue Shield of California confirmed it had been sharing private health data of 4.7 million users with Google for three years without even realizing it.

Delta and JetZero’s blended wing body aircraft marks a meaningful step toward a cleaner, quieter and more efficient future for air travel.

Recent reports show many common passwords can be cracked in literally seconds. Kurt the CyberGuy explains how to strengthen your passwords.

Stay up to date on the latest AI technology advancements and learn about the challenges and opportunities AI presents now and for the future.

Iron, a robot that stands 5 feet, 8 inches tall and weighs 154 pounds, combines advanced artificial intelligence with human-like movement and exceptional vision.

Hertz, the rental car giant, recently confirmed that customer information was exposed through a cyberattack on one of its software vendors.

There are a number of features with AirPods you may or may not know about to take your listening experience to the next level. Kurt the CyberGuy explains.

These 35 Chrome extensions have privacy and security concerns. Tech expert Kurt “CyberGuy" Knutsson says to delete them now.

Tech expert Kurt “CyberGuy" Knutsson says 329,000 mph fusion rocket promises to be fast, disruptive and enable deep-space missions.

Stay up to date on the latest AI technology advancements and learn about the challenges and opportunities AI presents now and for the future.

Tech expert Kurt “CyberGuy" Knutsson says a new autonomous AI is a game changer that also raises privacy risks. Is your data safe?

Tech expert Kurt “CyberGuy" Knutsson says robots and drones are revolutionizing fruit farming with faster picking and smarter handling.

Landmark Admin revises May 2024 cyberattack scope to show twice as many people were affected. Kurt “CyberGuy" Knutsson gives tips to help stay safe from an insurance data breach.

Tech expert Kurt “CyberGuy" Knutsson talks about how Yamaha’s hydrogen outboard motor could revolutionize boating with zero emissions.

Tech expert Kurt “CyberGuy" Knutsson reveals how to memorialize or remove a deceased loved one’s Facebook account and protect their digital legacy from misuse or scams.

Tech expert Kurt “CyberGuy" Knutsson says an Apple Watch saved psychiatrist Amanda Faulkner by detecting deadly leukemia early.

Scammers and fraudsters are increasingly targeting the most vulnerable, especially nursing homes and the personal data of their residents. Kurt the CyberGuy has safety tips.

Infected USB flash drives can spread malware among multiple organizations in ways that can easily bypass traditional security systems.

With a fully automated warehouse system and AI-powered robots, Ocado's Hive picks, packs and delivers grocery store orders in just a few minutes.

Stay up to date on the latest AI technology advancements and learn about the challenges and opportunities AI presents now and for the future.

Recycling robots are using artificial intelligence to learn how to sort recyclables by recognizing patterns in colors, textures, shapes and logos.