5 Ways to Successfully Increase Business Profits

Looking for ways to improve the financial health of your business? Passionate about helping the right people with their real-world concerns while generating reasonable profits from it? If so, this article is for you.  

Let's face it, to thrive in an overly saturated market, businesses need to focus on increasing profitability. This not only helps improve their market position but also attracts better deals, strategic partnerships, top talents, and fuels growth even further. 

However, being an entrepreneur is no easy task. It can often feel overwhelming at times. 

“There are no secrets to success. It is the result of preparation, hard work and learning from failure.” – Colin Powell  

The good news is there are several ways to increase business profitability and reach your goals at a faster rate.  Let’s start at these five (5) ways.  

1. Get Your Business in Front of the Right People 

Getting your business in front of the right people is one of the best ways to boost profit. There are plenty of methods to do this, but let's start with some basics:  

1. Social media is a great place to start, especially if you're already using it for marketing and customer service. Make sure you're posting relevant content that people will find interesting — no one wants to see another "buy my stuff" post from a company they don't care about. 
   

1. Video marketing is a great way to showcase your products and services, as videos can be shared on the internet. Make sure you record something catchy, relevant, and high-quality to keep people interested in what you offer.  

1. Email marketing can also be effective when done correctly. Just make sure that every email sent has something valuable for your readers (i.e., not just another sale). If possible, segment your lists so that only those who fit certain criteria receive certain types of emails—this way everyone gets what they came looking for.  

1. Blogs are another great way to get the word out about your brand since it allows you to reach more people. It can also help you build your credibility when you provide informative and interesting content.  

Read: Understanding the Basics of Data Analytics and its Application 

2. Use your Data to Increase Sales 

This is the first step in any process of increasing revenue and profits. It’s important to have all of your sales data together in one central location so that you can get an overview of how your business is doing as a whole, and where it could be used for improvement.   

Look at the numbers and analyze them to understand what's working and what isn't. This will include things like:  

• Sales figures from each department (if applicable)
   
• Sales figures from each product line and services 
  
  
• Sale prices for each item on sale (if applicable)  
  
  
• Average customer purchase size  

Next, take a close look at these figures. Is there anything unusual about them?  

If one department consistently underperforms others, then it may be necessary to focus more attention on improving that area. Alternatively, if a certain product line or service isn't selling well enough — perhaps it needs an overhaul, or new features added to help increase sales and make the product or service more competitive later.  

3. Track your Expenses and Income Closely 

The best way to ensure that you are maximizing profit is by keeping track of how much money comes in and how much goes out. This will help you make smart decisions when it comes to budgeting so that you can avoid unnecessary spending and make better investments in the future.  

For this reason, it's important to track both your income and expenses closely  

1. Income is the money that comes into your business from customers or clients. It can be generated from sales of products or services, as well as through advertising or marketing efforts. 
    
2. Expenses are the costs associated with running your business — everything from office supplies to employee wages and benefits.  
   
   

To stay on top of these numbers, set up a software that allows you to track the flow of money into and out of your business regularly. You should also have systems in place to remind you when payments are due and when they have been received (or whether they have bounced).   

Note: Setting up an accounting system also helps you have useful data to show investors or banks if they ask about how much money you've made over time — and what it costs to run the operation that produces said profit.  

READ NEXT: 4 Reasons You Should Always Keep Your Receipts  
 

4. Offer Great Customer Service  

No matter what type of business you operate, great customer service should be one of your top priorities. Many companies offer exceptional customer service because they understand that happy customers spend more money than unhappy ones do — and they tell their friends about how good their experience was with your company.  

The following tips can help you provide better customer service:  

1. Be friendly and welcoming. Customers appreciate being treated like valued guests in your store or office. Be polite, welcoming, and helpful when dealing with customers from the moment they enter your store or office.  
   

1. Listen carefully to customer concerns. Take time to listen carefully to what each customer says about their needs and desires for products or services. Once you understand these needs, it will be easier for you to provide solutions that meet those needs.   
   

1. Keep an open mind. It’s important not to judge a customer by their appearance or behavior; everyone has different reasons for visiting your store or office.  

5. Outsource to Save Money 

With proper implementation, outsourcing certain functions or departments is another effective strategy to reduce overhead costs and increase business profits.   

Outsourcing an accountant, for example, can give you more time and energy to focus on running your business instead of worrying about complicated bookkeeping issues like tax preparation or doing payroll calculations. Instead of learning and doing everything from scratch, you can entrust these matters to specialists who can complete these tasks faster and more accurately. 

The key to running a successful business is to ensure you have the proper processes and procedures in place to maximize your profit margins. Following the business tips and tricks, accounting advice, and ways to increase profits outlined should get you off on the right foot as you begin making your business profitable.  

FIND SUPPORT  

If you need help with your accounting processes and need accounting advice, contact us today. Our accountants are well-versed in using various accounting software.  

You can also read our white paper, Outsourcing: How to Make it Work to gain a deeper understanding of how you can achieve success in outsourcing.  

This post was first published on 15 October 2022 and edited on 19 March 2024.