Business owners must constantly look for profit-making opportunities, which can help them to secure their finances, grow their team, and enjoy longevity in an industry. Rather than relying on new customers to make their way to your business, you must aim to boost your cash flow and lower your overheads, which could help you to thrive each year.
If you want to strengthen your organization in 2019, here are five strategies to increase your company’s profit margin.
- Client Sharing
If you have a wide variety of clients on your database, you might be skeptical about whether you have the time and resources to add additional customers into your business.
Rather than rejecting their custom, you should consider client sharing with another organization. For example, if your marketing agency doesn’t have the time to create a $3,000 website for a client, you could request for a third-party agency to create it for $2,000, so you will receive an instant $1,000 profit. However, you must ensure you only work with reputable companies in your industry to maintain client satisfaction and a positive reputation.
2. Launch Referral Programs
If you have provided a customer with an exceptional product or service, they will be more likely to refer you to their friends, family, or colleagues. To increase your revenue, you should set-up a customer referral program, which will provide your current customers with a discount on future products or services following a successful referral.
3. Decrease Your Overheads
Businesses of all sizes will be forced to contend with various overheads, which can quickly destroy their profit margin. To improve your company’s financial circumstances, you must look for ways to decrease your monthly outgoings.
For example, it might help to:
- Downsize to a more affordable office space
- Compare business energy suppliers against one another
- Ask staff to switch to part-time hours
- Outsource projects to freelancers
- Barter with vendors
Review every outgoing in your budget to identify ways to cut costs and increase your company’s profit margin.
4. Hook in Customers with Freebies
Everyone likes something for nothing. To increase your customer base and, in turn, your revenue, you could entice people to your business with a freebie. For example, lawyers often provide free consultations to secure a new client. An auto repair shop might also hook in additional customers by providing a free oil change, which could lead to them booking additional services once they arrive at a garage.
5. Add a New Product or Service
Break into a new sector of the market by adding a new product line or service. For example, if you currently run a gym, you could boost your annual revenue by providing delicious energy drinks, protein bars, or healthy smoothies. It should tie in well with your existing services, and it could also help to separate your business from its local rivals. So, find a complementary product to add to your business and develop an effective marketing campaign to boost your awareness and profits.