I am always looking for ways to increase profits, as long as they are honest. The following list comes from the ebook You Aren’t Supposed To Know, part of The Secrets Package. There are twenty ways on that list. Ten of them are presented here. If you can apply even two or three of these you’ll probably boost your bottom line significantly.
1. Increase the Average Sale
Boosting the average sale is a powerful way to boost profits without spending money to get new customers. Fast-food places are doing this when they ask you, “Would you like something to drink with your meal?” Look for whatever ways work in your business.
2. Cut Your Costs
This is one of the most basic ways to increase profits in any business. If sales are not affected the money you save goes entirely to your bottom line. For example, if you invest a little in fluorescent light bulbs and save $42 per month on electricity as a result, you make $500 more profit annually. To accomplish that with sales you might have to sell $1,000 to $2,000 more in products or services depending on your margins.
3. Track Advertising Results
You should identify the least expensive ways to get new customers. To do this, track the results of your advertising. If newspaper coupons get you customers cheaper than your mailers. If so, you might do better by dropping the mailings and devoting the money saved to newspaper ads with coupons. Find a way to track results and be skeptical of advertising that doesn’t allow tracking of results.
4. Test Prices
Suppose you sell a product for $40 that costs you $30, and you sell 200 per week. Your gross profit would be $2,000 ($10 x 200). But what if you raise the price to $54, and as a result only sell 120 per week? Your gross profit is $2.880 ($24 x 120), or $880 more, despite selling less. Testing is how you discover the most profitable price.
5. Educate the Customer
Some accountants offer free educational seminars to teach people tax-reduction tricks. Many of those attending become customers of course. Sometimes you have to educate the customer as to why he or she needs your product or service.
6. Sell Your Customer List
My credit union does this now, putting offers from insurance companies and others in the statements I get each month. Sell or rent the list to companies with non-competing products. Let them either get the list or access through your own mailings. But try to add real value for your customer by only allowing relevant offers.
Look for low-risk ideas can you try to increase customer count or average sales amounts. For example, when working as a manager at a fast food restaurant, I once spent six stamps and an hour to mail invitations out to visiting high school sports teams. I bribed the coach with a free meal, and two bus loads came in the following week. With low risk experiments like this nine out of ten can fail, and you can still increase profits.
8. Get Customers From Failing Businesses
Let’s say you have a snow plowing service and you hear that a competitor is going out of business. You could wait to see if a few of their two hundred customers call you, but why just hope? Instead offer to take over the route and pay the owner $20 for each customer that stays with you for one season.
9. Sublet Space to Another Business
There is an ice cream shop I know of that rents out their lot to Christmas tree vendors in December. I also know of a bakery that was open only in the early morning that rented out the facilities for a pizza parlor that operated each evening. The money you get in this way from non-competing businesses is almost pure profit.
10. Increase the Frequency of Customer Purchases
Making more money from existing customers is almost always cheaper and easier than getting new customers. A carpet cleaning business, for example, could give a discount if a customer has carpet cleaning scheduled automatically for every six months rather than waiting until they think to call.