Wednesday, February 13, 2013

Improving Small Business Profits

Over the next five weeks I will be adding a new tip to help improve small business profits. Check back each week to ensure you don't miss out on a tip that could improve your businesses profits!

Strategic Marketing
Marketing is a great way to increase your customer base and in turn increase your sales. Marketing can be expensive but there are steps that can be taken to make marketing more efficient.
  • Take advantage of free marketing tools such as Facebook! Get your businesses names and products out there for the world to see. Increase your exposure through a Facebook page, blog or twitter account. These are all free and can increase your customer base. It also keeps you in the mind of your current customers as the more they see your name the more likely they are to buy from you.
  • Track marketing methods to see which are profitable and those that are not. This is especially crucial when you are paying for advertising. You want to be sure that the advertising is bringing in more than you paid for it. If you are running ads through conventional media sources ask new customers where they heard about you and keep a record of the totals. Successful ads you can run again and unsuccessful ones you will no not to use again. All businesses will have different marketing strategies that work based on your product or service, your location and your customer demographics.
  • Email customers instead of paying for postage. This may seem minimal but if you can save 10 rolls of stamps a year you have already added $460.00 to your profits with one simple step. Take advantage of free communication such as email and fax! 
Increase Average Spend
The first tip looked at increasing the customer base, the second looks at getting the most out of the existing customers. Putting systems in place to track average spend or average products purchased can be a valuable tool to your business. Tracking these numbers and then trying to improve them can help increase your total sales.
Track how different products you feature or promotions you run effect the average spend of your customers. Did it increase or decrease? Why do you think it effected the results? Did putting Chocolate bars by the register increase the amount you sold due to impulse purchases? These are the sort of questions you should be asking yourself and acting on the results.

Ways to increase average spend is to offer customers purchase options such as upgrades or add on items to their original purchase or looking to locate impulse items strategically in places that will catch the consumers attention.

Look out for TIP#3 next week!