Regardless of the nature or success of your business, there are always ways to increase profitability. It means being open to new ideas, as well as understanding the fundamental nature of increasing profits, either decrease costs or increase revenue. Below you can find six straightforward methods that your business can use to make 2018 the most profitable year yet.
1. Decrease stock levels
It costs money for your company to hold on to stock on the premise, and uses up valuable retail space. If you want to make major cost savings next year, you may need to invest in some modern inventory management software.
2. Reduce spoilage and waste
If you deal with any sort of fresh or seasonal products, then your biggest costs will be spoilage or wasted stock. Look back at past sales records and make adjustments to any new stock you’re ordering. It may be better to be one or two units short than to have 10 unsold items each day.
3. Make use of new card payment technology
Modern evolvements in card processing technology mean your business could improve its profit margin on every single product sold. Card payment technology allows your business to quickly upsell impromptu purchases, streamline your bookkeeping processes and avoid having lots of cash on your premises: all things that are costing your business time and money.
1. Up-sell and cross-sell
If someone is already purchasing something from you, the easiest way to boost margins is to upsell or cross-sell one or more other products. It won’t cost you any more to acquire that customer, and it will take very little time to sell to them, so you should use this method to maximise revenue.
2. Replace low-margin products
Take a critical look at all the products you sell and see which ones are actually making you the most money. Stocking and selling lots of very small margin products is often ineffective, and it may be better to try and sell slightly fewer products you make a much larger margin on.
3. Work on improving loyalty
Customer acquisition can be expensive and difficult, but once you have that customer, you should do your best to make them loyal. Loyalty schemes like weekly vouchers or point-collection cards are a great way to keep customers coming back time and time again, allowing you to boost revenue each and every week.
Increasing profitability in 2018 means taking a critical look at how well your business is operating. If you are happy to make changes and willing to adapt to your industry, then there’s no reason you can’t continue to increase your profitability and build an even more successful company. Being creative and proactive will help to bring about these changes.
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