There is a simple method to calculating your profit. Income – expenses = profit. Right, but there is so much more to that statement that you show know about. As such, what drives your profit?
In my 3rd book, Boosting Business Profit, I talk about the pathway that you should be following to improve that profit.
Here’s the pathway to higher profit broken down:
1. More Leads: not just leads, but the perfect customer ready to buy. Finding your ideal customer has always been a challenge but the best way to start is to clearly communicate your position of market dominance from your customer's point of view. This becomes the attractive magnet that boosts your lead generation.
2. Better Conversions: be able to close more leads into valuable customers. Improving your ratio with even small increases can have a major impact on your bottom line. Your conversions aren’t always the sale but often the next step in the process. The better you get at converting, the more sales that come at the end of your process. It really is a numbers game.
3. Retention of Existing Customers: it is always easier and less expensive to keep a customer. This second stream of income which comes from existing customers can be the difference in your profit. Your competition is at your doorstep. Don’t forget to take care of them so that they come back again and again.
4. Average Dollar Per Sale: get existing customers to spend each transaction. Customers will buy additional items when asked at the checkout. This will be multiples of the same item if they are consumable. This may also be a complimentary item that makes the purchase better. Bundling boosts the cart value, therefore, increasing the amount of the overall purchase.
5. Frequency: create opportunities for your customers to buy more often. This strategy is most often overlooked. Creating a relationship with your customer that brings them back is the best strategy. This idea works really well with non-consumable products and services as well.
6. More Profits: revenue is great but it’s what you take home that counts. If you don’t manage your expenses then you are killing your profit. Eliminating unnecessary expenses and lifestyle expenses can be an easy fix. However, more important places to look are to renegotiate the ones that you keep.
As you can see there are a lot of factors that affect your profit. And there are many subcategories within each. You can continue to work harder to produce more profit or you can work smarter to improve your profitability so that all of your hard work really pays off.
Marcia Riner is a business growth strategist. Small Business Owners come to Marcia looking to exponentially boost their revenue and profitability without spending an additional dollar on marketing or advertising. In fact, she is able to show prospective clients a clear ROI to working with her before they decide to hire her. Don't believe it? Let her prove it to you in just a few minutes.
Marcia hosts a weekly podcast with videos on YouTube @ www.Youtube.com/profitwithaplan and audio @ www.profitwithaplan.com. She is constantly sharing business growth tips on all of her social channels @marciariner
Marcia has created an incredible FREE webinar that will show you how you can boost your net profit by 45% in just 30 days. Go check it out while you can @ www.30dayProfitBooster.com