By Sandi Smith Leyva, CPA
Many entrepreneurs I’m currently working with are anxious to hit the golden $100,000 mark this year. Others are interested in growing their revenues steadily and incrementally. Still others are focused on lowering costs, raising profits from that side of the equation.
All of these approaches are well and good to help you keep more of what you make, but there are far more options to grow your take-home dollars besides raising revenue and lowering costs.
Here are six more ways to get more profit out of your business.
1. Change your revenue mix.
If you offer more than one service, chances are one service or product is more profitable than another one that you offer. If possible, look at ways you can increase sales of the more profitable service while reducing sales on the less profitable services. When you do, you’ll instantly have more take home money than you do now
2. Change your price.
Interestingly, increasing your price doesn’t always generate more revenue.
Rather than increasing your price, you might be able to actually lower your price, increase your volume, and make more overall revenue. This technique is more effective for product sales than service sales, but you never know until you try it. Experiment with this on a test basis to see whether lowering your price generates more profits for you.
If you’re working too hard with long hours, your price may be too low. Raise your price to adjust demand, and you’ll be able to stop working so hard but still have just as much revenue coming in.
3. Change your customers.
If you have lots of different customers from varying industries and sizes of businesses, it might be fun for you but also exhausting. The more different your customers are, the harder it will be for you to get up to speed to serve them well.
To increase your profits, attract a very similar customer over and over again. For example, all lawyers or all hypnotists. You’ll be better able to serve them because you already know their business and industry and the common problems they all have. You’ll also become an expert and it will be easier to market to your new niche.
4. Change your volume.
If you’re constantly struggling to cover your overhead or reach your revenue goals, you might have a volume problem. This means you’ll need to market more to get more customers or sell to existing customers and increase your revenue per client.
5. Change your measures.
Be sure your accounting system is delivering the type of reports you need in order to track your revenues, your costs, and your margins for each service, each product, and even each customer. That’s the only way you’ll have the detailed information you need to act in a fiscally responsible way and fine-tune your business profits
6. Change your mind.
If you haven’t taken a look at where you are now and where you want to be so that you can have a plan to bridge the gap, then you might be in denial about your business. Taking action will get you out of “dream” mode where you might be wishing your take home pay was higher and into reality mode where you can make it happen. Take action by planning and executing your plan, one change at a time.
Those six ideas will “show you the margins” and help you find some more summer income in your business.
Sandi Smith Leyva Sandi Smith Leyva, CPA, helps accountants in small practices boost their revenues in her Accountant's Accelerator program (http://www.fillyouraccountingpractice.com).
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