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While working with small businesses over the past 15 years I exposed there is truly only five definitive ways to boost your bottom line profits. 1. Reduce your costs. When a business endeavors to slash costs, the first place to start is with recurring expenses. The majority of businesses can shave thousands of dollars in extra fat per month. Maybe there are additional phone lines you can cancel, you might downsize your garbage can pickup, revoke client lunches, lay off the cleaning lady and offer a couple more hours to your sales staff to clean, etc. Another way to "trim the fat" is employees. Small businesses should to define the slackers and purge them from the team. As harsh as that may sound, in general, companies tend to have at least one or two too many workers for the workload they actually have. If laying people off too extreme then i suggest cutting hours of the deficient employees or at least hand out pay cuts. Other thoughts consist of cutting expenses on rent/mortgage, insurance, payroll, accounting, electric, etc. Shop and negotiate for reduced payments. On a side note, beware of cutting from your advertising budget. You should scrutinize your marketing and make sure you are receiving the most bang for your buck., but don't cut it out. Advertising should in fact be increased if it's getting your return on outlay. And lastly, you must scrutinize your cost of goods. Many companies fail to notice the bottom line price per item. Take into account the cost of shipping, storing, boxing etc. It's a good idea to locate your lowest gross margin item and discontinue it. 2. Increase Margins. Find your highest gross margin item and concentrate on it. If you have a retail store put it in the premier real estate, if you sell intangibles, make awesome new sales pieces for that item and lead with that Item. Another way to strengthen margins is to buy right, "buy low sell high"! Buy lower sell higher! Maybe you look for bargains, free shipping deals, closeouts, etc. 3. Increase Prospects/ Leads Whether it's pounding the street, networking, conventional advertising or sending emails to your database, find a way to escalate leads and potential clients. If you are in retail put out a few new signs or banners, if you sell intangibles, network and implement database marketing. 4. Close More Sales It's not enough to catch them... you have to skin them as well. Set up a follow up system that follows up with prospects that didn't buy. They say it takes five or six contacts before the majority of sales are made. 5. Increase Frequency of Sales It's been confirmed that it's 60-80% easier to sell a present client then a new one. Spend some additional time with your top 20% of your customers. Show them other products or get them to increase frequency of their purchase. In the end, each of these steps separately will increase your bottom line, however if you put into practice all five of these steps, you ought to effectively over double your bottom line!
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Coach Eddie Prosperous Christian Christian Business Consulting, Business Coaching
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