Top Ideas to Increase Profitability in Small Businesses

On 19th January guests and members of the Wow Network met at the Make me a Millionaire event. One of the issues we asked everyone to debate was ideas to increase profitability in small businesses. Everyone came up with some great ideas which are below:

1. Charge more for your time – don’t be afraid to increase your prices
2. Constantly review your clients and the prices you charge – if necessary cull small value clients if they are not proving to be profitable for your business
3. Cross-selling – Create packages to make this easier, use a matrix to plot out your existing customers and opportunities for cross-selling. If you’ve not got your copy of Wow’s Cross Selling Matrix yet e-mail info@thewowcompany.com to receive your copy.
4. Tiered approach to cross selling/ up-selling – Consider introducing bronze, silver and gold tiers
5. Remind existing customers of the additional products/services you provide.
6. Don’t give it away! There is often information/ assistance of real value to clients that you give away for free which could be chargeable
7. Targeting clients effectively – Create a profile of your ideal client in terms of profitability and other criteria that identifies them. Don’t be afraid to turn away business if the client doesn’t match your ideal client profile and therefore won't be profitable for you.
8. Niche marketing – focus on marketing which establishes you as the expert in that particular niche
9. Review Costs – Regularly review your costs and make the infrastructure as slim as possible, including reviewing monthly budgets
10. Consider increasing the range of products and services you offer - are there gaps in your offering?
11. Increase the value for money you offer and differentiate yourself from competitors
12. Increase your customer base
13. Target and know who your clients are and most importantly are there enough of them?
14. Sell more – do you have a plan of how you are going to sell more in 2010?
15. Cut costs – consider outsourcing tasks if it will be more profitable for you to do so. Make sure you are fussy when picking suppliers and check terms beforehand. Read more about getting good value from your suppliers here.
16. Stop wasting time on marginal activities, for example chasing small debts and focus on what is important and will add to your profit
17. Narrow your product range first, build close relationships with your customers. Focus. 
18. Work out where your profit is coming from – which activities, products or services are really adding to your bottom line?