Five Break-through Ideas to Immediately Increase Profits and Improve Cash Flow

Too often in business we get trapped into reviewing our sales numbers without analyzing the all important "profit" number. This is commonly referred to as the "bottom-line" of a business. There are various ways you can dramatically impact your profitability.

1) Under Pricing Kills Profits!

Many small businesses have thinner profit margins than larger firms do because they tend to under price their products or services. So why not just raise prices? I know the feeling--you're scared that your competition might swoop in like a bird of prey and your customer base might shrivel overnight!

If you have thought about raising prices but haven't done so, let me give you an example that may give you the confidence to do so. My client, Steve Lopes of Stanley Steemer based out of Edison, NJ had a positive experience from raising prices about a year back. After giving me much resistance to my advice to raise prices, Steve agreed it would be prudent to test it. The result? Sales and profit went up for the month in which he raised prices and Steve was pleasantly surprised at the little, if any resistance he got from his customers.

Since then, Steve has increased prices 2 more times. What happened to sales and net profits? Sales surged by 25% for that 12-month period and net profits for that same period skyrocketed by 84%. Since Steve's sales are in the 7 digits, these sales and net profit increases equate to very significant numbers. Best of all, it allows Steve with a lot of extra cash to do things he wanted to do in his business and personally.

Still unsure about raising prices? Remember, you can always cut them back. More likely then not, you'll be surprised at the positive impact it'll have on your business, assuming of course you continue to provide the same or better level of service to your customers.

2) Is The Marketing Working?

Make your advertising accountable.

You've probably heard the familiar maxim: "Twenty percent of my advertising brings in 80 percent of my business, but I don't know which 20 percent!" I see that as a common problem with many small-businesses. They don't track their marketing to know what's working, what's not. This problem stems from a bigger problem and that is not being aware of the difference between institutional and direct-response advertising.

Institutional advertising, also known as image advertising, is all about you, the business owner. How great you are, your qualifications, years in business, "full-service" product line, etc. It's the most common form of advertising. You see institutional ads every day in print or in TV. They're often cute, creative, funny, utterly ineffective and not trackable. Simply put, an institutional ad has no way to track results and is there to keep the company name in front of the public.

By contrast, direct response advertising is all about your customer and his or her needs. Its purpose is to stimulate a phone call, letter or a visit. Best of all, unlike an institutional ad, it is trackable so you can make every dollar you spend on it accountable. This then helps to measure the effectiveness of each ad.

3) The Easiest Way To Profits

Keep a lid on spending! Resist the urge to spend freely. You may like the way a lavish office and expensive furniture looks, but does it really contribute to your business? In some businesses, a fancy office is critical; in most it is not. I once had a small business owner who spent $5,000 on his front office desk in a business operation that had no "office visits." Needless, to say, this business owner did not survive too long in business due to this and other extravagances. Get as much value out of every transaction, whether you're leasing office space or stocking the kitchen.

Important caveat: Don't compromise when it comes to spending money on your own self-development. Small business owners don't give this enough importance and thus spend far too little money in this area. This is a big mistake. As an example, in the next 5 weeks, I'll be attending three conferences across the country and investing about $4,300 in seminar tuition fees, travel and boarding. Not a small chunk of change you would agree, but in my opinion, well worth the investment. You are the most important asset in your business. Take good care of you.

4) Have You Got A Back End For Every Sale?

Most small-businesses ignore the easy money to be made with a back-end sale. Yet, the really smart business owner never forgets that the most profitable words in the history of business were: "Would you like fries with that?" I have read that these words instantly doubled the total sale.

Your biggest expense is reaching a new customer. If you succeed to winning him over to the point that he pulls out his wallet and gives you money. . . he will often continue to give you money if you offer something else. Yet, you do not need any expensive advertising to do this ? he's already listening to you. You simply have to open your mouth and offer him something else.

Savvy small-business owners will have something more expensive to sell, and something less expensive. Something else that fits in with whatever the initial sale was. . . and something else that just has broad appeal. But they will always have something on the back-end.

5) Outsource Judiciously

One of the battle cries in business today is to determine the one thing that your business does best, become even better at it, and outsource absolutely everything else. There is certainly a lot to be said for taking a careful look at every function in your business and asking yourself if you should outsource it. But take a hard look at the numbers before you decide to jump on the outsource bandwagon!

Salim Omar, CPA is the author of the newly published book, Straight Talk About Small Business Success In New Jersey now available in Barnes and Noble bookstores and on Amazon.com.

More free information can be accessed on his website http://www.OmarGroupCPA.com

---

How to Profit Handsomely From a Secret Business Model Virtually No Small Business is Using!

Have you been searching for the perfect home-based business? I... Read More

Professional House Cleaning - The Dirty Little Secret

Are you tired yet of all the books out there... Read More

How to Give FREE Advice and Make Money

When is advice free and when should you charge for... Read More

Success & The Nature of Things

The story is told of a tiger chasing some goats... Read More

Getting Behind in Your Work? You Need a Virtual Assistant!

If you don't know what a Virtual Assistant (or VA)... Read More

Shopping For a Franchise

Shopping for a franchise is easy if you know what... Read More

Finance Your Small Business: So Much Money, So Little Time

$37.4 million funded from venture capital today. $86.4 million funded... Read More

How Micro Loans Can Mean Macro Success for Your Business

"Inch by inch, row by row...that's the way my garden... Read More

Business Failure, The 8 Traps Causing Failure And The One Attribute Which Ensures Business Survival

It is estimated that 78% of all small business start-ups... Read More

Three Small Business Secrets to Getting More Billable Time

As small business owners we're in business to make money... Read More

Keeping your Business Alive

As long as you eat and breathe you will stay... Read More

How To Accept Credit Cards

If you plan to do business online, then your website... Read More

Real World Accounting for Small Business Owners

If you're like me, you love accounting. It's so fascinating... Read More

Buying a Business

Start thinking about buying an established business if you want... Read More

Small Business Debt Collection Laws

In your small business debt collection laws will eventually become... Read More

Temporary Staffing Agency: How to Start

The temporary staffing industry continues to expand, with yearly double-digit... Read More

11 MONSTROUS Small Business Marketing Mistakes and How To Avoid Them

Increase your profit potential by identifying ? and avoiding ?... Read More

Are You a Small Business Casualty?

When a person knows and knows not that he knows.... Read More

How To Select a Franchise

Here are some useful tips on how to select a... Read More

Starting a Business in New Hampshire

Hew Hampshire car wash market. Well we have visited every... Read More

Justice In Action

During the 1980 presidential campaign, candidate Ronald Reagan vowed, if... Read More

A Business Plan Is Not Worth A Cracker To A Struggling Business - A Plans The Last Thing It Needs

Before you start a business we encourage you to prepare... Read More

The Perfect Mission Statement

One way to determine your companies mission statement is based... Read More

Debt Collection Techniques

Here are some sound debt collection techniques that can be... Read More

Creative Metrification - A Technique to Improve

Some things in business are relatively easy to measure ?... Read More

Encouraging Your Customers to Pay On Time

Nothing can drive a business down faster than customers who... Read More

Image of Your Franchise Automotive Outlet is So Important

Image of your franchise automotive outlet is so important. Some... Read More

Business Checks are an Added Cost to Your Small Business - Try Making Them Yourself!

Starting and managing a small business is no fun chore,... Read More

Do You Own Your Business Or Does It Own You?

What was your aim when you went into business for... Read More

Using Excel Payroll Sheet to Make Payroll System Easier

For the employees, payday is the brightest day; they finally... Read More

Franchising and Royalty Payments

If you are thinking of turning your current into a... Read More

Does Your Small Business Marketing Suffer From The Bulldog Effect?

If you're an entrepreneur responsible for your own small business... Read More

Franchising VS Business Opportunity; What is the Difference?

The modern Franchise business model and the much different business... Read More