By Mehar Mouzzam 
Starting a small business with my life savings was a dream come true. However, being inexperienced, I was fixated on increasing my sales to become profitable.
Undeniably, increasing your sales is an incredibly effective way to quickly become profitable. And, while I’ll discuss this key factor later, I did not realize that it isn’t the only way.
For a long time, I neglected several ways that could’ve helped my business from the very first day. So, sharing what I learned in all these years, I’ll explain a few ways that can exponentially increase your small business profits.
Let’s take a look.
Lower Overhead Costs
Overhead costs are one of the most recurring expenses in any business. It includes services such as electricity, internet, phone, and other utilities. Technically, overhead costs are indirect costs that are not related to the production of goods or services. But, they’re necessary to run the business.
It took me a lot of time to understand that reducing costs, specifically overheads, can directly translate to better profit margins. And, in my experience, lowering overhead costs is much easier.
You just need to carefully analyze your business’s overheads and find an opportunity to bring them down.
For instance, I managed to save a significant amount on utilities like the internet and phone. Although these two utilities are my business’s lifeline, their collective cost ached my financials. So, after exploring different options, I bundled them with Spectrum.
The Spectrum Internet price was less than what I previously paid for my connection. Plus, it offered uncapped plans and unlimited calling, which helped lower their cost. So, look around, observe overhead costs, and find creative ways to cut them down.
Optimize Marketing Strategies
I made a terrible mistake of choosing multiple platforms to market my small business. I always thought, and still believe, that marketing on social platforms like Instagram, Facebook, etc, can generate leads and sales.
However, paid advertisements on these platforms can be expensive. And, my experience has taught me that it is not even necessary to utilize every social platform to advertise your business.
As a small business owner, you need to identify and choose one or two social media platforms used by your target audience. And, it’s best you focus on only those platforms because:
- You can save a significant amount from your marketing budget.
- It’s easier to manage one or two social media platforms instead of focusing on multiple ones.
- You can create better, laser-focused campaigns and optimize them for better results.
Plus, besides paid ads, I would also advise you to allocate business resources and manpower to organic advertisements, such as Search Engine Optimization (SEO). Although organic methods can take time to produce results, when done correctly, they can significantly reduce the overall marketing budget.
Efficient After-Sales Support
I created chatbots and deployed them on social media accounts in the name of after-sales support or customer service. Honestly, they helped in dealing with customer queries, but I soon understood that they weren’t enough.
According to reports, 68% of customers are willing to pay more to a brand known for its reliable customer support. And, as I was already struggling with customer retention and profit margins, I took a leap of faith and expanded my customer service.
I started offering a multi-channel support which included email, phone, and live chat. And, while I faced a few issues at the start, my after-sales services gradually improved and significantly helped me with customer retention.
So, I’d say that indirectly, an efficient and effective customer support can help grow your business. And, eventually, positively impact your profit margins.
Expand Your Business
It is one of the most apparent ways to increase your business’s profit margins. Expanding your business can include different measures, such as franchising, increasing your products and services, or entering new markets.
In my case, I focused on increasing my services. I run a small software house, and initially, we only offered Java and C++ related services. However, I lost clients who required Python-related services. So, I hired a freelance Python expert and started learning it myself.
And after some work, I acquired a few clients whom I previously rejected because of a lack of services.
This way, I increased my skillset and saw a positive change in my business’s profit margins. So, explore how you can expand your business to increase your business’s profits.
Analyze your Business Financials
In my experience, this step indirectly helps in profiting your business. As a small business owner, you should effectively manage your resources. However, this is not the final step, because after allocating your resources to different tasks, always analyze how they are utilized.
As small business owners already have too much on their plates, they can easily neglect resource and financial management. But I would advise you to take some time out every month and assess how efficiently your business performed.
Consider the total revenue, expenses, waste, and other financial factors. And, analyze if there’s a way to optimize your business operations. This way, you can find multiple opportunities to streamline your financials and utilize them to get more output.
So yes, my experience tells me that increasing your sales by introducing new products or markets can profit your business. But it isn’t the only way to do so.
You can also implement the above strategies to make your business profitable.
Also, before I wind up, keep in mind that staying consistent in your efforts is the key. While some of these ways can show instant improvement in your business profits, other steps may take some time. So, implement these strategies and stick to your efforts to see a positive growth in your business’s financials.