When you’re ramping up your small business and have your sights set on being profitable, every dollar counts. Here are several different ways you can improve the bottom line for your small business.
The expenses associated with getting your brand, products or services off the ground can feel potentially crippling. On the other hand, if you are looking to make your business successful in the long run, the wisest thing you can do is to go into as little debt as possible and avoid paying interest that can stifle your business’s growth and future earnings. However, if you have ever tried to accomplish this kind of tedious, methodical financial strategy, you are also aware that it can be a steep hill to climb. This is especially true when you factor in obstacles like the fierce competitors you will face who have more brand recognition, higher marketing and advertising budgets and aren’t afraid to make cut-throat moves like pricing you out of business entirely.
So how do small businesses protect their bottom line and forge their own path to becoming profitable? That’s a great question that unfortunately doesn’t have just one straightforward answer. The reality is, there are as many ways to successfully navigate your way to profitability as there are different businesses. Sadly, it is also true that there are many more ways to fail at this than succeed. To help guide you towards your own success, check out this list that highlights some proven strategies you can use to improve your bottom line and get a leg up against the stiff competition you will face while you take your business from startup to scaleup.
First, it is important to understand that there are only two areas in finance that you have control over to improve your bottom line: Increasing your sales and decreasing your costs. With that in mind, we have separated the helpful hints below into these two categories.
1.) Content Marketing
Getting your name out there usually takes a combination of time and money. However, these days, you don’t have to go out and publish ads on major media platforms in order to reach an audience. Instead, you have the ability to create content that you can connect to readers through a combination of social media, blogging, vlogging, etc. Of course, you are still competing for attention against thousands of other brands and businesses, but the playing field here is on more even ground.
The key is to focus on specific criteria for your content before exposing your consumers to it. Consider these 3 criteria as a beginning benchmark for your own content pieces:
- Quality Above Quantity: Publishing content for the pure sake of publishing is a quick way to dilute your own credibility. Treat your consumers like content cattle and you’ll risk losing the herd.
- Authenticity is King: There is virtually no end to the amount of content out there for consumers to digest. The amount of blogs, images and video that are published just to improve a company’s ranking in search is immeasurable. In order to rise above the publishing fodder, you need to produce content that has a hope of connecting with your audience. Being authentic about who you are, what you’re about and who your message is for is your best chance at accomplishing this.
- Delivers Specific Value: Being authentic and engaging with high quality content isn’t enough to drive sales. You also need to deliver a specific value with your content that your consumers, and the peers that they will be most likely to share your content with, can benefit from.
2.) Email Marketing
Although email marketing can be considered another form of content marketing, there are some important differences that are worth paying attention to, and the two actually work best hand-in-hand. A notable difference between email and blogging is that to send out marketing emails, most companies use ESP (email service providers) to manage opt-ins, list segmentation, analytics, etc. These tools are critical assets to managing your email campaigns and determining their effectiveness. However, unlike simply posting a blog or sending out a tweet, sending emails with an ESP is almost never going to be free. The good news? If you carefully curate and manage your email lists, some studies show that you could expect returns of roughly $38 for every $1 you spend on this kind of marketing.
Sounds pretty spectacular, right? It certainly can be IF you manage your campaign strategy effectively. The trick is to begin collecting emails early and use your permission to contact your subscribers wisely. Here are just some of the tactics used to turn your customers’ inboxes into a sales generating machine:
- List Segmentation: Separating your email contact lists by characteristics or preferences, which allows you to later send messages more tailored to their interests.
- Trigger Campaigns: A series of emails that send out automatically after being initiated by a specific action, or “trigger”, like a customer filling out a signup form or visiting a certain page on your website.
- Abandon Cart Emails: Email generated by your eCommerce cart or ESP to remind your customer about the products they left in their shopping cart.
3.) Up-Sell, Cross-Sell, Re-Sell
There is no consumer more likely to purchase your product or service than one who already has. This is because they have already been exposed to your marketing, weighed their options against your competitors and ultimately decided to become your customer. Now that the time has come for them to need a new or similar product, all you need to do is reinforce that they made the right decision, and maybe even deepen the relationship through up-selling or cross-selling.
For companies like Amazon, cross-selling products has represented upwards of 35% of their total revenue. This selling phenomenon is not unique to the big brands. By strategically merchandising your products or services together in ways that are intuitive, you could be seeing a big uptick in your own sales by simply making it easier for your customers to find products similar to ones they are looking for.
4.) Create a Budget and Stick To It
The only way you can know how much money you have to make in order to be profitable is to have a firm grasp on what your expenses are. Once you have these clearly identified, you can begin to plan and allocate funds when and where they are required. Doing this routinely can act as a solid baseline for managing your finances so you can be more effective with your spending and avoid wasting capital on unnecessary assets or services.
5.) Lose The Landline
If your small business is using a traditional landline, it is time you consider more cost effective alternatives. For a team of one or two, it may make sense to simply use your cell phones with cheap or free apps that allow you to manage multiple numbers on the same device like Google Voice via Hangout Dialer, YouMail, etc. For larger teams, you may want to consider affordable Voice Over Internet Protocol (VOIP) services like Vonage or Dialpad.
6.) Use Service Providers, Freelancers and Contractors
Keeping a business running takes people, and people are almost always the largest expense to hit the bottom line. Savvy business owners often are able to keep costs down by relying on a combination of professional services, freelancers and contract labor as opposed to the spendy move of hiring internally.
Professional Services: When you need a specific set of tasks done that have a high impact on your business, it can often make sense to rely on an agency that provides professional services. These services can simply be relying on shippers like Fedex or UPS to move your products. Other forms of helpful professional services include using phone answering services from a reliable call center that will act as your virtual receptionist handling calls for your business 24/7 so you can focus on other important tasks without missing any opportunities.
Freelancers and Contractors: If you are looking for an inexpensive alternative to hiring an employee, freelancers and contractors can be an excellent, flexible resource. Unlike an agency that provides a repeatable, dependable service, Freelancers tend to be individuals who fill in where a business requires a specific skill set, but may not have enough need in that particular area to require hiring a resource full time. Hiring cost-effective resources like this can give your business the boost it requires to be successful.
Whether you choose to focus on charging after more sales, or have your eye trained on running a tight and tidy ship with low overhead; at the heart of it, you are working hard to improve your bottom line. To be truly effective, you should take a balanced approach and pay close attention to both your sales and your costs. Neglecting either of these for too long could upset the financial balance of the whole business, while walking that fine line can lead to impressive success for your small business.