As a small business, it is always possible to make more profit. However, there are several strategies that a small business should follow to ensure that are able to increase their profits in the long-run.
It is advisable to look at your expenses from month to month and then year to year to ensure that you have a full picture of where your highest expenses lie. On establishing which expenses are highest, work on reducing these. Use comparison websites and get quotes from many suppliers to ensure that you have the best deal out there. You may find that you are paying far too much and you will be able to decrease an expense just by simply moving to a new supplier.
Use a Competitive Pricing Strategy
Development of a pricing strategy from the start of your business is worthwhile especially in the long-run. It is easier for a new business to keep prices below the competition to entice new customers, but this will lead to little or no profit. The best way to ensure that you make some profit is to complete a competitive analysis before setting your prices. Once you have established how your competitors work than you should layout a pricing strategy based on your finding. This will allow you to make some profit eventually to cover costs and expenses.
Planning in Advance
By planning in advance, you will have a road map that you can follow to ensure that you end up making a profit in the long-run. This plan needs to incorporate efficiency, productivity and business organization. By being efficient you will be able to cut costs and hence increase profits. Increasing productivity ensures that the works is done quickly. Business organization ensures that you have the right tools in place to ensure that efficiency and productivity are at a high level. This will lead to profits as staff are able to complete their jobs in a quicker more productive manner.
The digital landscape has filtered into every part of society and hence it should be embraced into your small business as well. A lot of digital processes can also lead to automation processes which will lead to lowering costs and profits. Growing your business online is an excellent way to increase sales and increase your customer base as well. Having a social media presence and interacting with your customers online could also increase your trust amongst customers who prefer multi channels of communication. These are many ways to increase your profits using digital in your everyday business dealings. You will have to explore various options to discover which works best for your customers and business model.
Shoaib Aslam is the co-founder of Pearl Chartered Accountants, a UK-based chartered accountancy firm that has multiple locations across London. They are experts in helping startups and established businesses with all aspects of growth, strategy, scaling up, accounting and tax planning.