Business tips to increase profitability
Looking to sell your business? Or simply want to become more profitable? Here are our top business tips to increase profitability. Keep scrolling to learn more.
The best time to sell your business is when there is a high demand for your products and/or services and you have several years of proven profitability. Why? Because this shows a potential buyer that the investment is likely to pay off and makes your business stand out amongst the crowd. If you’re not looking to sell your business in Sydney, then this article is for you too! Every business owner wants to increase profitability. Whether the goal is to attract business buyers or to increase profits for yourself as a long-term business owner; here are our top tips to increase profitability in your business.
- Reduce costs
Overheads such as electricity and water; supplies that are unnecessary or too expensive; excessive spending on areas that you can easily cut without affecting operations or team morale… The list goes on. If there’s an area that is costing the business, identify whether this cost can be reduced. For example, turning the lights off overnight, switching suppliers or buying in bulk.
- Find your profit margin sweet spot
You may want a 70% margin on your products, but reducing it to 50% may allow you to sell over double. Therefore, assess your competitor’s pricing structure and determine whether a change in your profit margins could make a big difference to your overall profitability.
- Improve your product or service offering
Maybe it’s time to offer something new and exciting! This could be a new service or perhaps a new product or product range. In short, a fresh offering could be the fresh start your business needs to boost profits.
- Capitalise on previous customers
Sometimes business owners are so focused on attracting new customers, that they forget to nurture the ones they already have. With that in mind, focus on customer retention – what are you doing to entice them back? They’ve interacted with you before, so touch base and see how they’re doing. Show that you care by offering them something special and get them to bring their business back to you. It is also important to have a spread of customers so that there is not too much reliance on just a few, as this makes your business reliant on those customers in the eyes of a potential buyer.
- Expand to new customers
The only way to get your product or service in front of the eyes of new customers is to market your brand efficiently. Find a marketing team you can trust and have honest discussions about your goals, budget and plans. After all, some creative, out-of-the-box thinking or advertising campaigns can be all it takes to attract new clients and allow your business to thrive.
- Improve productivity among the team
Ever heard the phrase “work smarter, not harder”? Productivity is the art of getting the most amount of quality work done, in the least amount of time. For example, you can set incentives for your team, boost morale and motivate them to succeed. With a productive team, you can increase profitability and self-esteem in one fell swoop.
- Assess performance and act
Grow from your previous performance by assessing it and learning from your wins and mistakes. Did your attempt to inspire the team fail? Why? Learn from it and try again. Did your business profits plummet during Winter? Why? Do something different as you approach Winter next year. Ultimately, by reflecting on business performance as a whole, the business can become better and more profitable each year.
In summary, a profitable business is an attractive business! Want to improve your profitability before selling? Follow the above tips and let us know how you go! On the other hand, if you’re ready to sell your business, contact the Core team by giving them a call at (02) 9413 2977. Alternatively, email [email protected] or [email protected] to begin your business sale journey today. To keep up to date with our latest listings and blog releases, follow us on Facebook!
