If you’re a kiwi small business owner you might be thinking of an easy way to lift your profit margins.
In this blog post, we breakdown 8 expert tips that you can use to achieve this goal. Take a squiz.
8 Expert tips to lift your profit margins and boost product quality
#1 Boost the efficiency of operations
Make sure that your business is efficient and productive enough to get more work done at lower costs.
Automate repetitive tasks, use programs that have been customised to your requirements, and optimise inventory management with qualified professionals and cutting-edge technology.
#2 Decrease overhead costs
Keep your overhead costs to a minimum.
Your utility bills, office supplies, advertising costs, accounting costs, etc. fall under overhead costs. Work with your team and your accountant to find the best way to compromise on overheads so you can raise your profit margins.
Accounting overheads can be decreased significantly by outsourcing. You may think that outsourcing is more dear than hiring in-house accountants but this is a myth.
There are many ways in which outsourcing can help your business. Drop your email in the chat and we’ll send you our FREE Ebook on why you can’t afford not to outsource.
You can also use this guide to determine how much you should ideally spend on your small business accounting needs.
#3 Focus on products and services with high profit margins
Produce and sell more units of your big – ticket items. You can also boost customer satisfaction by bundling them with other products or offering benefits like loyalty discounts.
Re-introduce these items as your premium range of products so that people will be tempted to buy them for their higher product quality. This will also increase customer lifetime value of your existing customers. Introduce new products that are high-margin if you don’t already have them.
You can also encourage your sales staff to cross-sell and upsell these products. Guide them to especially target high-paying customers with low sensitivity to price changes.
#4 Invest in taking care of your team to boost product quality
Make sure your team has proper working conditions, work-life balance, and good career opportunities.
This helps you cut down on unnecessary hiring expenses and boost efficiency and productivity.
#5 Adopt more organic and affordable marketing strategies
If you’re looking for ways to increase sales while cutting down costs, invest in digital marketing which is more affordable than traditional marketing.
Build up a loyal customer base and boost customer retention with channels like social media, or retarget people who have previously signed up on your website by promoting your products via email.
For a better digital marketing experience, get the services of a digital marketing and SEO expert.
#6 Get on top of your cash flow
Keeping your cash flow records organised can help. Get an experienced accountant to do this for you. Once this is done, use it to organise and manage your expenses.
Your accountant can also draw up a cash flow forecast to predict future cash flow as well as sales increase and decrease patterns.
#7 Negotiate with your suppliers for lower prices
Negotiate with your existing suppliers for lower prices based on loyalty or ask for offers and discounts. You can also research for better suppliers with more reasonable prices.
#8 Review your prices regularly
Regularly compare your prices with those of competitors and compare your suppliers’ prices with those of other suppliers in the market.
Make sure that you’re not pricing your products too low and spending too much on supplies.
Our expert accountants can help you raise your profit margins
Stay on top of your finances and stay profitable with the expert guidance and skills of our chartered accountants.
Drop a kia ora in the chat and we’ll take it from there!
