As a small business owner, you understand that there are essential items and practices that will lead to your larger success. However, you may not know exactly what those things might be. Every business is different so the exact application of certain strategies might differ from company to company, but the technique is pretty consistent.
If you’re looking to grow your small business and increase your profit margins, then here are a few ways to do just that.
Get to know your customers better
Your customers are your bread and butter; they’re the ones who buy your products or services and keep the lights on. Yet, it can be difficult to differentiate your customers from the figures in a ledger. To consider your customers nothing more than transactions would be a grave mistake; it’s important to realize that these are people with feelings, thoughts, and most importantly, buying patterns. Ignoring buying patterns can mean a loss in customers, which as you know, it is 25 times more expensive to acquire a new customer than it is to retain one. Therefore, getting to know your customers better can allow you to identify possible purchasing trends and use that knowledge to increase your business. For example, say you sell coffee. You know that 54% of Americans over the age of 18 drink coffee daily but what you don’t know is what type of coffee they’re buying, in what quantities, and how often they come back. Identifying these trends can help you implement sales and discounts or otherwise incentivize customers to come back into the store.
Identify areas of weakness
Your business is only as strong as its weakest link and identifying that link can help you implement a solution to bring it up to speed. Is your sales team able to meet their quotas and attract new customers? As stated before, knowing your customers can help your sales team approach them with new products and services that align with their purchase history, which makes for an easy (and low-cost) sale. Maybe your marketing department is lacking and you aren’t getting the exposure that you were hoping for. Analyze your current strategy and come up with new alternative methods of getting your company name out there. Direct email, internet marketing, blog posts, event marketing and guerilla marketing are just a few ways to revamp your marketing campaign. Whatever it may be, it’s important to recognize where your company may be lacking and to look for new opportunities and approaches.
Don’t compromise quality for cost
This isn’t really a technique for growing your business but more of a guideline to help you during your growing process. It’s important to maintain the quality of your products and services during your scaling efforts. Failing to do so will simply negate any growth you’ve been trying to achieve. Cutting corners in an attempt to save money will only result in a loss of more money via customer satisfaction. That holds true for most of your business practices as well. For instance, if you own a brick and mortar store that’s at risk for theft and you cut costs by choosing not to pay the average annual salary of almost $30,000 (according to the U.S. Department of Labor) for a security guard, then you’re sure to suffer far more in store losses. While it may seem like a good idea, you should analyze the risk and reward of every business decision you make.
It’s okay to outsource
Cutting costs and looking for better business practices are two very different things. Outsourcing certain departments can ultimately save your small business a lot of money while still maintaining the overall mission and production of your company. According to Deloitte’s 2016 Global Outsourcing Survey, many companies choose to outsource IT with 31% of IT services being handled by a third-party. However, it’s imperative to find a reputable company to outsource to that won’t diminish the quality of that particular department’s products or services.
There are numerous other tips for both short-term and long-term growth and it’s important to always look for new ways to grow your company. Success isn’t always measured by how much revenue you bring in but by how well you do whatever it is that you do. Customer’s recognize passion, so remember to keep that your top priority.