Posted On Nov 16, 2022

When you give lots of keynotes or public talks to business owner and entrepreneurial groups like I do you get hit with the same questions over and over.

One of the most common questions I get is, ""How do I increase my profitability?""

It's a great question. Here in one list are 30 simple strategies to increase your profits and profit margin. I've already ""field tested"" these ideas in my work with my company's business coaching clients over the past decade. They work, if you put them into practice.

Here we go...

1. Increase pricing. Bar none this is the easiest answer for many small companies, especially those who have been in business for a while. Most businesses set their prices when their business was first launched, and since they were so hungry for business, they set pricing levels low. Over time, the business likely only made nominal increases to pricing every few years, but rarely did the owner ever sit down and fundamentally rethink his or her pricing model. If it's been over a year, time to look at it again.
2. Redesign workflows and systems for greater efficiency. Cut steps, reorder processes, reengineering physical workspaces, etc.
3. Eliminate tasks and activities that don't add value to the company or customer. Every dollar you save by eliminating the cost of things that don't add value to your company or to your customer drops directly to your bottom line.
4. Give your team a clearer picture on ways they can contribute to profitability. Every team member is an agent to increase profitability. Empower them to be part of this search for ways to increase profitability.
5. Regularly review your administrative and operational staff levels closely. Most service and administrative departments can be cut by 1 in 4 with no impact on quality of work. Many can handle 1 in 3 cut with no significant negative impact.
6. Look for ways to increase value to clients and customers. This will help you shorten your sales cycle, increase your closing rate, lengthen your client retention, and perhaps, increase pricing.
7. Increase the dollar value of every purchase transaction with your clients. Think up-sell, cross-sell, and resell... Ask, "How can I get each customer transaction to be for a larger dollar amount?"
8. Beware the steep cost of attrition. Customer retention is a strategic expense if spent wisely. How can you increase your customer retention?
9. Feed your winners; starve your losers. This includes with your marketing activities, your sales force, your general staff, your company initiatives, your reporting, etc. So cut your losers, and feed a portion of the saved time and money into your winners. This will greatly boost your profitability.
10. Feed your winning sales people more leads (even if that means you starve your lower performing sales people of leads.) Audit the "$ value per company generated lead given to a sales person." This is not a time to be "fair", but to be strategic. Be transparent about this and let it be a spark to help Fred learn how to increase his own dollar value per company lead given to him.

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