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Last week, members of The Wow Network took part in two teleconferences where we debated some great tips for small businesses to increase their profits. Below is a short summary of what we discussed. Let's be honest, this isn't rocket science, you'll already know most of what we talked about. However, hopefully there'll be an idea or two in there that reminds you about something that you've been meaning to do for a while - this could be your opportunity to do something about it and increase your profits before the end of the year.
Don't be afraid to increase your prices year-on-year. Your costs are going up each year and so should your prices.
Productise & package your offerings
A number of the business owners on the teleconference had done this in the past 12 months, with really positive results. Many had created 'Small', 'Medium' & 'Large' packages for their clients to buy, ensuring that whichever one they bought, it would be profitable for them. Making it easy for your clients to buy from you in this way can only be a good thing.
Clearly ringfence the scope of each project
This applies particularly to service businesses - those that swap time for money. If you don't clearly ringfence what you will do (and what you won't do) for each project, you'll end up spending more time working for less money.
Charge for extras
Following on from this, if you clearly scope out a project, then there is a much better chance of charging for those extra items that crop up. Too many businesses simply complete these as part of the initial project, therefore missing out on valuable revenue. As one business owner put it "don't be afraid to say no." This will help avoid the dreaded 'scope creep'.
Get rid of your unprofitable clients
A brave thing to do, but something that one business owner on the call does every 6 months. They review their clients' profitability and if the least profitable ones aren't prepared to review their fees, they help them find another provider (they actually take great pleasure in referring them onto their competitors, knowing that they'll be unprofitable for them too!).
An obvious one this, but when was the last time you looked at your costs for the year? Are you getting value from all your suppliers?
Get streamlined. Get efficient.
The business owners on the teleconference understood the impact that efficiency gains can have on profitability and had invested time simplifying systems and procedures, as well as creating simple templates to ensure that things get done quicker and to the same standard each time.
Travel less. Skype more.
It was interesting to see just how many people were doing this. They recognised that the cost of travel wasn't just the fuel in your car, or the cost of your train ticket.... it was time too. Skype and other virtual meeting technology is allowing people to speak to more people than ever before in a day. No traffic jams, no crowded trains and you'll see the impact on your bottom line too.
"Only do the things that only you can do", as one business owner put it. This helped them rise above the day-to-day to start looking at even more ways to increase their profits.
Make the most of your existing customers
Ask for referrals, see what other products and services they'd like to buy from you, get close to them and build relationships. Again, this is pretty obvious stuff, but how many of us are TRULY making the most of our existing customers? What more could we do?
The aggregation of marginal gains
One Wow Network member on the teleconference talked about the importance of looking for all the little things that add up to increase your profit. It might be making small steps in each of the areas above. But do nothing, and you'll get nothing. Make some changes, and you're likely to see the results. So....