11 Jun 3 ways to increase your profits (including the ‘quick & easy’ way)
What I’m talking about in this article is increasing your profit by increasing your revenue. Check out this previous blog post too about managing your costs.
When you started out in business, THE most important thing was finding clients who would pay you. Now though, you have enough clients. In fact, you’re really busy, but somehow your profits aren’t reflecting the effort and time you’re putting in.
It’s time to move your business on to the next stage and stop focusing on chasing all types of work and clients, and start getting serious about increasing your profits.
Broadly speaking, there are 3 key ways you should be looking at to increase your revenue and your profits.
1. Increase the number of customers
This is where most people start. However, if you’re looking at this as a way to increase your profits when you’re already maxed out, then you’re setting yourself up for a fall.
If you’re selling a product then this may be an option as increasing your number of customers may not take too much additional time.
If you’re selling a service though, and especially one that requires your time, then how are you going to effectively provide new customers with what they want if you don’t have the time available?
Think very carefully about exactly what will be needed to increase the number of customers and if you are going to be able to fulfil this.
Finding those new customers isn’t always that easy either, so how much time and money will you need to invest in finding them to begin with?
2. Sell more to your existing customers
What else do your existing customers want to buy that you could offer?
Talk to them and ask them. Make sure they know about what else you could provide to them.
Look at the average value a customer spends with you and think about ways to increase that by offering additional products and services.
Consider any special promotions you could run e.g. spend £x and get a free bonus/gift, making £x your new target for the average value a customer spends with you.
Consider having a premium priced offering. A VIP type package that people can upgrade to. What would this look like for your business?
There are always people who are willing to pay extra for a premium offering.
Let me give you an example of where I’ve missed this opportunity in my own business. In the last Business Bootcamp I ran a couple of months ago, when I was getting the feedback after the final day one of the attendees said she would have paid more to have the option of some additional one to one coaching with me during the Bootcamp.
Arghhh! I missed an opportunity to offer my Bootcamp attendees an upgrade option, to have extra one to one support. Won’t be doing that again!
Looking at selling more to your existing customers may still take some additional time, though it shouldn’t require the upfront investment of time in finding new customers.
If you want to know the easiest and quickest way to increase your revenue and profits then check out number 3:
3. Increase your prices
After reviewing the first 2 ways to increase your profits, can you see how increasing your prices can be the quickest and easiest way?
But, if you’re like lots of business owners then your initial thoughts are probably ‘No, I couldn’t possibly increase my prices, people will never pay it’.
So, even though this is the quickest and easiest thing to do, lots of business owners avoid this because they are scared. Scared that no-one will pay the new price. Scared to have the conversations with existing customers, ‘what if I lose my current clients?!’
My strong message to you is to get over being scared and try it out, especially if you have already had people tell you your prices are too low!
Pick a new price now, one that feels a stretch but that you are still comfortable with. Look to use this new price with new customers initially and build your confidence that people will pay it, then plan to roll it out to your existing ones.
If it helps, I’ve seen business owners take the leap and do this so many times, and not once have I known someone to regret it. Instead they will be saying ‘why didn’t I do this sooner?’
Once you’ve done it, make it part of your business planning to review your prices regularly.
A quick word of warning, you don’t need to make a song and dance about increasing your prices and you don’t need to justify why. Just do it and say the new prices confidently, whilst at the same time focusing the client on the value they will be getting.
Leave me a comment and let me know how you get on or any more advice you’d like on increasing your prices and your profits. 🙂