4 Ways to Make your Small Business Profitable

Knowing the ways to make your small business profitable is very important to success. Many business owners don’t understand the difference between profit and revenue. Some think as long as they are making money they are successful. Profit is the money left over after all your expenses. We’ve all heard of companies shutting down due to financial reasons. It’s because their overall profit isn’t enough compared to what they are putting out financially.  We hope that these things listed below will help you and give you food for thought when thinking about your business and how to make sure it stays profitable.

Set Monthly/Annual Goals

A business takes time to build. Creating a strategy with monthly goals and then yearly goals is key. Setting these goals to look out at year 1, then year 5 are ways you can see where you want to be and then push to get there.  If you focus on monthly sales goals, your sales objectives become more clear. Knowing the numbers you need to on a regular basis also will help you stay focused. You can find more information on setting financial goals here.

Automate Where Possible

Just because some of the smaller things in your business are small, it doesn’t make them any less important. We’ve talked about automation and how this can help you save time previously. (You can find that blog here.) Automation of your business is a great way that you can increase productivity and profitability.  Taking time from the little things that make your business run allows you to focus and push full speed ahead on some of the things your small business might be struggling in or just need to dedicate more time with.

Track Everything

The easiest way to make money is to do business wisely.  Meaning, little things like confirming appointments, confirming orders and making sure your numbers are right. Nothing like ordering not enough product when there’s a minimum required and now having to deal with being short or paying more to order a second order. Also, track the performance of everything. Limit what is not selling and stop continuing with advertising if it’s showing minimal results. You can also track employee costs. Part-Time employees cost less than full-time employees but know that generally, your turn-over might be higher.

Ask for referrals

Stop and ask yourself: How did you find your doctor?  A babysitter for your kids?  The chances are that you do business with someone who a friend recommended.  Asking friends, family, and current clients to think of you when they come across someone that might need your service works!  If you don’t ask for something. No one knows you need anything.  When they are happy with what they are getting from you or see the value in your services, you would be surprised at how many will spread your name- they just need a little push.  However, make sure you’re asking customers who are happy with your service. You don’t want that awkward moment of asking for something they don’t want to give you. More referrals equal more customers.  The best type of advertising is word of mouth. Think of even creating a referral program that can be automated and save you so much time!

What other things could you do to increase profitability for your small business?  Feel free to reach out to us or check out this podcast with Robert Stasio, who specializes in setting up overall strategic focus, expanding the customer network, and works daily with secure tech startups from around the world helping them refine their positioning and go-to-market strategies.