So, your startup’s profits aren’t quite where you want them to be, and you’re scratching your head trying to figure out why. Sometimes it doesn’t matter how hard you work if you’re missing integral pieces of the puzzle. Don’t spend another second trapped in underperformance woes when you don’t have to! I’ve comprised a really straight forward list to help you grow your profits from “zero to hero” in just 8 simple steps.
#1. Run More Sales
Running sporadic sales can excite customers to spend more money than they’d usually spend. Who doesn’t want a good deal? Make sure you convey when the sale will end to present your customers with an immediate since of “shopping urgency”. Use dates, times, etc. Example: “20% Off ALL Summer Items” “Don’t Miss Out!” “Ends 2/19/2015 at Midnight EST”. Although it may seem like you are getting less money, you may end up making a lot more than you’d normally make without a sale. Think about how the big box brands do it. They typically have a new sale every week. Sometimes people buy things even if they don’t need them if they’re on sale. Now, I’m not saying that you should run sales as often as a large business, but consider running one at least 1 to 2 times a month and see if that helps boost your profit.
#2. Sell Products With Higher Profit Margins
If you are selling products with very low profit margins, there’s really only so much you can make. Consider going with products that have more attractive profit margins, and your startup will thank you.
#3. Find Cheaper Wholesalers
It may be time to ditch your old wholesalers to find ones that are more affordable. Sometimes when business owners are first starting out, they tend to gravitate to a small few dedicated wholesalers and stick with them throughout the entire time they’re in business. As time grows and you experience more competition, you’ll need to make sure that you’re getting the most competitive prices on the market. Do a little research to see if you can find vendors who sell the products that you need at lower prices than you’re currently paying. Or, ask your current vendors if they are willing to provide any price breaks if you place larger orders.
#4. Set Daily Financial Goals
Most large companies have got their daily goals down to a science. The same should go for small businesses and startups. Write down daily goals for your business, so that you have a visual for how much you want to make. Start off in an obtainable range and gradually work to grow your profits as time goes by.
#5. Increase Client Traffic
Maybe your profits are low because there aren’t enough people buying your items. Do a detailed summary of your traffic reports. If you have a website, note how many people are visiting each day. If you have a physical store, count how many customers stop by. From your traffic, figure out how many people usually purchase out of every X (this number could be 10, 100, pick any number that is relevant to your traffic) amount of visitors. You’ll also want to note the average amount each shopper spends. From there, you can calculate how many more visitors you’ll need in order to raise your profits. Let’s say 5 out of every 10 visitors actually buys something from you. That’s 50%. Let’s also say that the each shopper spends about $20 on average. So, if you had 30 visitors today, you’d make $300. If you’re trying to reach a goal of $1,000 a day, you’ll need at least 100 visitors per day. Plug in your variables and see how this works for you. Note: these numbers are not exact; they will vary but at least you’ll have an overall idea to help you grow your business.
#6. Update Your Storefront
Make sure your business is represented in a modern way that appeals to its consumers. Dust off your shelves, update your website from the 1990’s, and meet your customers where they are. Sometimes the smallest improvements can help create the largest impacts. It shows that you value your customers enough to invest in improving your brand.
#7. Increase Your Social Media Marketing Presence
Keeping your clients informed about your company’s latest offerings may help increase sales. Increased sales means increased profits. Find a balance between Facebook, Twitter and whatever else you use and try not to spam. Post enticing news that captivates your audience to make them want to “click” to find out more.
#8. Reassess Your Pricing
Are your prices reflective of the current market that you are in? If you are selling craft beers for 5x as much as your competitors, perhaps you’re scaring customers away… Reassessing your prices can help you figure out if you’re on the right track. Don’t just grab a number from out of thin air and go with it. Carefully research your industry, find and analyze a common price range, and choose something that your customers might be familiar with (while also keeping note of how much profit you can clear).