According to reports, 50% of business fail under 5 years of operation and the major reason for this decline is the constant dropping of profits which disrupts the cash flow.
Many entrepreneurs do not give a thorough thought on increasing their net income and it becomes their downfall. While it’s not a piece of cake to boost your business profits out of the blue, placing certain strategies at the right time and in the right way can make it happen.
Here are 5 tips on how to increase your business profits:
1. Strategize To Convert One Time Buyers Into Regular Buyers
According to this study, regular customers are bound to spend 300% more money on buying stuff compared to customers who are first-time shoppers. This is enough reason to work on a strategy that helps convert first-time buyers into recurring buyers.
The biggest benefit of following this strategy is that it is fairly easy to make a customer into a recurring buyer than to invest money in marketing and try to find new customers every time.
Tip: To convert customers into recurring customers, you need to get in touch with them even when they are not buying from you. To do this, create an auto email generating policy that will pass an email to all past customers so that they do not forget about you.
A simple and friendly gesture or a deal promotion can remind your customers about the last time they bought from you. This increases the chances of them buying from you again.
2. Provide Discounts
This strategy works like a charm because no one wants to let a discount pass by. Connect with previous customers or clients and offer them a timely discount. This will not only create a positive impression on them but might very well get them to purchase from you again.
Tip: It requires a bit of a homework. You need to make a list of previous clients who bought a specific product from you. Choose a product in your arsenal that gives you the highest profit on the sale and find customers that have bought similar products in the past.
This way, you’ll be targeting a relevant audience who are more likely to be interested in this product that you are providing a discount on. It will strengthen the relationship of the customers with you and will also boost your profits as the sales go up.
3. Improve Product Quality
Discounts and promotions might get you one time sales but will fail to bring the customers back again if the product lacks in quality. Therefore, improving the quality should be your first preference.
There are many businesses who are generating 20% more profits compared to their rivals only because their products have better quality. One such example is Fbabee, which is in a different niche but enjoying great returns due to its impressive quality.
Tip: Conduct a survey from previous customers and find out what they liked about the product they bought and what they hated about it. Note down the dislikes and work on it.
Improve the quality of your products or services to grow your customer base and increase your profit.
The simple rule of business is that more investment will bring you more profits. A partner by your side will not only help bring more capital but will also help maintain operations and reduce your burden.
Tip: Look for a partner with experience in maintaining the kind of business you have so that he or she can help your business grow. However, be careful when selecting a partner as choosing the wrong partner can cause a lot of harm.
5. Use An Inventory Management Software
Time is of huge value when it comes to running a business. There are hundreds of competitors who might get ahead of you if they have better means of managing their inventory and dealing with customers.
Stay away from doing jobs manually and try automation as it does not only help complete more tasks in less time but also reduces the risk of errors.
Tip: Invest money in having a management software created that is as per your business requirements. It will make your work easier in following orders, storing information, keeping inventory, and more.
Follow these tips to boost your business profits and see your business grow rapidly.