Here are some essential techniques and approaches, in the form of
questions. These are used by the highest-paid consultants to help owners and managers make their businesses more profitable. If you have a business or are going to start one, find answers to these questions. By the way, I give just a quick example with one type of business for each, but with a little imagination, you can apply these techniques to almost any type.
1. Can you increase the average sale?
This is a powerful way to boost profits without spending money to get new customers. This is what fast-food places are doing when they ask you, "Would you like something to drink with that?"
2. Can you increase the frequency of customer visits or purchases?
Again, it's usually cheaper and easier to make more money from existing customers than to get new ones. If you have a carpet cleaning business, for example, you could give a discount if they have the carpet cleaning
scheduled automatically for every six months.
3. What is the least expensive way to get new customers?
You have to track the results of your marketing and advertising to know this. If coupons in newspapers get you customers cheaper than your mailers, you should probably drop the mailings and devote that money to newspaper coupons.
4. Can you get good publicity somehow?
Publicity can be a cheap way to get customers. If you have a fishing gear shop, you might write a fishing column for the local newspaper, or sponsor
a fishing competition for kids. 5. Have you tested prices?
If you sell a product for $20 that costs you $15, and you sell 200 per week, your gross profit is $1,000. If you raise the price to $27, and only sell 120 per week, your gross profit is $1,440 - $440 more, on fewer sales. You only learn these things by testing.
6. Can you educate the customer to increase sales?
If you are an accountant, you could offer a free educational seminar to teach people tax-reduction techniques. You will be the expert they think of when they need help, of course.
7. Can you "sell" lost customers to a another business?
If you sell new cars, for example, and the customer can't qualify for financing, you can still make money on them. Send them to a used car lot that finances bad credit risks. Arrange beforehand to get a commission for each person you send that buys something.
8. Can you sell your customer list?
Even my credit union does this now, putting offers from insurance companies in with my statements. The idea is to sell or rent the list to companies with non-competing products, of course.
9. What low-risk ideas can you try to increase sales?
I once spent six stamps and an hour to mail an invitation out to visiting high school sports teams. I invited them to come to the fast-food restaurant I managed, and bribed the coach with a free meal. Two bus loads came in. The point of the low risk ways is that nine out of ten could fail, and you can still make money for the effort.
10. What are similar businesses doing that works?
own ideas, but why not also use ideas that have already been proven to work? This is usually the fastest way to success.
11. Can you get the customers of failing businesses?
Suppose you have a snow plowing business and you hear that another plowing business is closing down. Why wait to see if a few of their 200 customers call you? Offer to take over the route and pay the owner $20 for each customer that stays with you for three months.
12. Can you sell things or services for other businesses?
When I sold real estate, the buyers could buy a "home warrantee plan" that covered major systems in the house. We were paid a commission by the company selling the plans.
13. Can you sublet space to another business?
An ice cream shop I know of rents out their lot to Christmas tree vendors and others during the winter months. A furniture store with extra space could sublet to a company that sells paintings. Extra income like this, from non-competing businesses, is almost pure profit.
14. What back-end sales can you make?
These are the sales-after-the-sale. If you sell pets for example, you can offer buyers ten percent off any supplies they buy today.
15. What ways can you cut your costs?
As long as you don't also reduce sales, the money you save goes 100% to your bottom line profit. Save $500 per year on electricity for a $200
investment in fluorescent light bulbs, and you'll be making $300 more profit every year. If you have a 25% margin on sales, you'd have to sell $1200 more to accomplish that with sales.
16. Have you tried different headlines for ads?
change in a headline can double the response. 17. Is ad-bartering possible?
This is a great way to cut the cost of advertising. If you have a pizzeria, for example, you can hand out coupons for a video store if they will hand out coupons for your pizza.
18. Can you pay employees for results?
I had an employee at a restaurant that could replace any other two and do a better job. If you can't pay directly for results (like with per-piece factory pay), try to give more hours and bonuses to the more productive employees. 19. Can you redeploy business assets in a more profitable way?
Maybe you would make more money selling off you equipment, leasing instead, and using the money for a good marketing campaign. Think of your time as a business asset too. How can you most profitably use that?
20. Do you have a follow-up plan for customers?
If you have a cleaning business, you might have a simple plan, like: 1. Schedule a reminder call for the next cleaning; 2. Leave an extra card for them to give to a friend, and; 3. Put them on your Christmas-card list.