Part 2: 10 Important Tips to Increase Profits
In continuation of the 10 Important Tips to Increase Profits, if you read the first part, you would have seen the first 5 things you need to know and do. Every dollar you raise is a price, if you hold costs constant, flows straight to the bottom line as profit. Every dollar you reduce is expenses, if you hold sales and revenues constant, also goes straight to the bottom line as net profit.
6. Cost of customer acquisition: The amount that you have to pay to acquire each paying customer.
You should be continually seeking creative ways to improve your advertising and promotion so that it costs you less to buy each customer. This can impact and increase profits of your business dramatically.
7. Increasing customer referrals: The customers who come to you as the result of referrals from your satisfied customers. Developing one or more proven referral systems for your business can have an inordinate impact on your sales and your business will make more money.
8. Eliminate costly services and activities
Many companies get into a routine or rhythm of offering expensive services to their customers that they could easily discontinue with no loss of customer satisfaction. Look at the little services that you offer to your customers. Is there anything that you could reduce or discontinue altogether?
9. Reduce your break-even point
This is the number of items that you must sell each month to break-even or start making a profit. You use this break-even point to evaluate the potential effectiveness of any advertising or any other expense that you incur to increase sales. Every expense to increase profits must be seen as an investment with an expected rate of return that is greater than the cost.
10. Raise your prices
In many situations, you can raise your prices by 5 or 10 percent without experiencing any market resistance. If your products and services are of good quality and your people are friendly and helpful, a small increase in your overall prices will not drive your customers away.
When you practice continuous improvement in all of these areas in your business you will make more money, increase profit in your business and help contribute to your future financial success!
This was originally written by Brian Tracy as 10 Tips to Increase Profits in Your Business