All businesses work for the sake of profits. This is what you take home and you cannot grow until you increase profits, but it is easier said than done.
It is believed that 90% of all businesses fail in the first five years of operation. A major reason for such a huge number of businesses failing is falling revenues. However, you do not have to worry because there are ways to increase profits.
Without much ado, let’s have a look at how you can increase your profits:
1. Make More Sales
Firstly, know the difference between revenue and profit. Revenue is the amount of money a business earns and profit is the amount of money a business takes home after subtracting all expenses. It is basically your net income.
Your sales help improve your revenue, but it has a direct impact on your profit based on how much net income you earn on each sale. So make sure to make efforts to improve sales.
This can be done by decreasing or increasing prices, generating more successful leads and coming up with great offers.
2. Use Technology
You can use technology in the right way to increase profits. Now, technology can do a lot for you. It can replace human capital, help you find more customers, and perform tasks quickly and without error.
Let’s talk from the perspective of sales. Imagine you run an ecommerce store selling fashion items. A potential buyer visits your store and has a question for you. Normally, businesses have helplines and emails to allow customers to get in touch, but with changing times customers’ needs are changing too.
Today’s customers want ease, which is why 70% of customers prefer live chat over other options. This is because live chat is a lot quicker to solve problems and is easier as well since there is no need to turn to a phone to make a call or sign up for an email. You can get your queries answered there and then, and this is where technology comes into play.
Many businesses are already using AI technology to handle live chat section. With the use of such technology, you can reduce the number of people working in the customer service department since you have bots answering customer queries.
This does not only help you save money but also reduce response times. However, this is not the only benefit of technology.
We have account based marketing framework to help businesses understand processes better. Moreover, customer management software can help retain customers and even differentiate between good and bad leads so that time can be divided properly.
All in all, technology can help you increase profit by reducing expenses and increasing revenue. However, it is a major investment but it’s good in the long-run.
3. Reduce Expenses
If you cannot increase output, you should work at decreasing input. Work on reducing all kind of expenses. For example, if you have a rented space, you can shift to a smaller office that can accomodate your staff but costs less.
Other tips include getting rid of employees you do not need and reducing energy bills. Use energy efficient products and pay your bills on time to avoid surcharge.
These simple but effective tips can help improve the bottomline.