How To Increase Profit – 7 Simple Strategies

how to increase profit

Learn how to increase profit quickly with these 7 tactics. 

There’s bound to be something in here that you can apply immediately.

Increase Prices

I know, it sounds ridiculously easy.

In fact, it’s so easy that most people in business dismiss a price rise with a thought like, “my customers would all leave if I did that.”

Yet whenever my clients have done this (and over 80% have used it as a strategy) their profits have substantially risen, without losing any good clients.

Do the maths and work out what an extra 5-10% on your price would do to your bottom line profit.

You will be surprised at just how easily you can improve the bottom line of your business.

This is one of many tips to increase profit in my award-winning book, Double Your Business.

Compare Quotes To Results For Jobs, Projects & Sales

Many companies that do projects, like alarm or electrical installations, provide a fixed-price quote for the job.

But then they don’t actually track the real cost of doing the job versus the quote.

If your business is not making much profit, a great place to look is the actual cost of sales, versus what you quote.

There is almost always a gap.  Sometimes that gap is so big, you’ll be losing money hand over fist. Sometimes it’s just enough to pay for a nice holiday or two. Other times it’s the difference between just surviving versus earning a great income.

Renegotiate Rent

While not commonly considered, most landlords would prefer a tenant on a lower rent than an empty unit.  Get into a constructive negotiation with your landlord and see if you can reign in the monthly rent.

Finding this useful? For more ideas on how to increase profit, click here to download 21 Ways To Increase Sales for many more free ideas.

Change Suppliers

Profit is obviously the difference between sales and costs, so when considering how to increase profit in your business, you need to look closely at your supplier costs. 

An easy way to do this is to go back through all of your monthly spend and find new suppliers, or negotiate better deals with existing suppliers, so that you’re getting the best deals from them. 

You can normally save anywhere from 10-20% if you shop around and do your research well.

Sack Expensive Customers

You know the kind of customer that calls 3 times a week, spends half an hour moaning about your prices, fights every invoice, pays late and expects special favours?  They’re costing you money.

Look at the profit per hour of your worst customers and get real with them – tell them you’re not able to work this way with them this way, put up their prices or get rid of them.  But don’t suffer in silence.

Use Processes To Eliminate Costly Mistakes

If you waste a lot of your time fire-fighting and dealing with issues, you are wasting a lot of time and energy.

Growing your business means being efficient and smart with your time.

Investing the time to systemise your business will mean that people know what to do, even when you’re not around to answer questions.

Systems eliminate mistakes before they happen, make life simpler for your staff and take the drama out of the day to day business.

They’re also a great way to increase profits; when you make no mistakes, expensive waste is eliminated, making you more efficient and profitable.

Introduce A Higher-End, Luxury Product or Service

A clever way to increase margins in your business is to offer a luxury or specialist product that’s attractive to the top 20% of your customers. 

In fact, many businesses focus on the highest value customers completely and become highly profitable as a result.

Offering the best service and product in your business is a great unique selling point when it’s done well.

It’s what Apple do – selling just 10% of the global smartphones by volume, but picking up some 70% of the available profit. Less work, more money, on a massive scale.

In terms of a more everyday example, just think about car manufacturers.

They offer variants of their vehicles – a basic model and also luxury and sports variants.

This allows them to increase prices further than usual, giving them better margins for the same basic product.

How To Increase Profit – Final Thoughts…

Above all, though, you need to take some action.  Your business can increase profits, of that there is no doubt, but only when you take action…

I have put together a special guide that shows how to increase profit with many more ideas. You can click here to download 21 Ways To Increase Sales for free.

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Lee Duncan

Lee Duncan is the author of "Double Your Business: How to Break Through The Barriers to Higher Growth, Turnover and Profit", from Financial Times Publishing. He teaches the owners of small to medium businesses how to make more profit and enjoy more free time.

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