How Can I Make My Business Profitable?
What’s one goal that every business owner has in common? They all want to be profitable. Afterall, why are you in business? But just how can a business consistently remain profitable even when there’s an economic downturn or global pandemic underway?
If you are ready to take the necessary steps for your business to not just make sales, but turn a profit, here’s a few tips that will help you become successful.
What’s Your Net Profit Per Hour?
One of the easiest ways to create profit is to consider how long it takes you to provide a service or create a product. Your net profit per hour is your net profit before you deduct taxes. Then, you divide by your billable or revenue producing hours. Using this formula, you will be able to see how much profit you generate in your business. And if it is too low then you will have to take the necessary steps to increase your profit. By increasing your fees, cutting expenses or even taking steps to increase your overall sales, you will be able to make a profit in your business.
Review Your Finances Monthly
At the end of every month, review your banking statements. In your review, make sure that you have received payment for all services rendered and that all of your expenses have been paid. Even the slightest error–a missed invoice, a vendor who overcharged you or cancelling a subscription that you truly don’t need, will place money back into your business.
In addition to reviewing your statements, consult with an accountant. An accountant will help you identify various strategies that will help you save money in your business.
Build Relationships With Your Customer Base
One of the keys to running a profitable business is developing strong relationships with your customers. It does not matter if you sell candles or makeup, run a daycare or a carwashing business, you need to nurture a relationship with anyone who has purchased a product or service from your business.
So just how do you build relationships? Everytime you deliver a service or sell a product, collect contact information. Add it to your contact spreadsheet and then, follow-up periodically. One of the easiest ways of keeping in touch is through email. You can send weekly emails with valuable information related to your business or promoting a sale.
Another way that you can keep in touch with customers is by simply picking up the phone. There’s nothing like getting a personalized phone call from a business that wants to connect.
Read This: Six Ways to Increase Your Cash Flow
Did you know that 92 percent of consumers rely and trust referrals from their associates? It’s true! If you want your business to be profitable, provide quality products and/or services so that your current customers believe in the value of your business. And when customers believe in your value, they will share you with others.
Never hesitate to encourage your current customers to refer you to others. By printing a statement on your invoice or even better, on marketing materials, you are letting your customers know that you are interested in more business.
Here’s a great tip: Contact your customer within 30 days of completing a service and ask how they enjoyed your service. Then, ask if they have talked about the service to other people. And if they have, ask them for the contact information of those leads.
By focusing on the your business’ finances as well as developing and maintaining relationships with your customer base, you will be able to begin building a profitable business.