The 3 Ways to Grow Your Business While Increasing Profits
Most business owners have the desire to see their business grow and exceed annual revenue goals. But common metrics for growth and success can often be misleading if you are not closely examining the big picture.
On the surface, a look into your company’s gross revenue may give off the impression that business is booming. But remember, profit equals revenue minus expenses. If the income you take home at the end of the day is lighter than you were anticipating, it may be time to reevaluate the expenses of your bottom line.
Building revenue without the tools to increase profit and decrease spending can be tricky, and often requires a lot of careful planning and market research. If there were a single, simple solution to building profit, no company would ever declare bankruptcy.
However, with the right partners at your side, you can explore proven growth strategies to help determine the best path forward for your business and become more profitable.
At Sebastian Lane Consulting, we help our clients increase their top line and bottom line—meaning an overall increase in their profits. Here are our top three ways to grow your business and its profits:
1. Raise Your Prices
One way to grow your business and its profits is to increase your prices. However, increasing the price of your business’ services, even marginally, can be a risky venture. Especially considering the recent rise in inflation and global energy costs. Asking your clients to pay higher prices may drive them directly into the arms of your competitors, so a deft touch is essential in retaining their continued business.
The key to a strategic price increase is timing. Your clients will be more amenable to a higher rate of service if your company has already proven to go above and beyond to meet their needs, and customer satisfaction is at an all-time high.
Your clients may also be more willing to accept a higher rate if you offer additional services, future discounts, as well as tangible improvements to your products and services that do not dramatically increase your expenses. Do not count solely on the loyalty built from a pre-existing relationship with your clients. To keep your clients away from the competition, you need to prove that a price increase is not only justified but beneficial to both parties.
2. Target More Clients
Another way to increase your profits is to get more clients. Landing an extended contract with even a single high-value client can be a game-changer for certain businesses and make a huge impact on their profit margins. Or you can target many clients for smaller projects.
The first consideration would be what your current capacity is. Once you know your capacity, you will know how much more work you and your team can handle. Then, evaluate what types of clients you currently have. If you have a mix of long-term and project-based clients, you should consider whether adding one or the other would be more beneficial. For example, if you have a steady amount of happy annual clients, you could focus on adding high-ticket, one-off projects. On the other hand, you may have a fair number of one-off projects, but not a lot of long-term clients. In this case, you will want to market your monthly or annual services to help bring in a steadier stream of income.
Just remember to not neglect your current pool of clients. Leverage your already-existing relationships with your clients for networking opportunities. When appropriate, do not be afraid to ask if they have any friends or colleagues who may be interested in doing business with your company.
3. Increase the Frequency of Clients Purchasing Your Services
The third way to grow your business is by increasing the frequency with which your clients purchase your services. So, ask yourself, what can your organization do to increase business from your already-existing clients? Are there gaps in your services or requests clients come to you for that you don’t already offer?
Offering additional products or services is a common way to transform single transaction customers into long-term clients. It also keeps your current clients coming back for more instead of moving onto your competitors. But a new product or service offering is only appealing to your clients if they fit a need. Anything new you offer your clients should be useful and compatible with what you currently offer.
Please note that the development of new products and services can quickly eat into your bottom line. Acquiring new partnerships, as well as outsourcing certain tasks to third-party agencies can help your company save money while you expand out your products and services.
At Sebastian Lane Consulting, we can help determine which growth strategy is right for your business. By analyzing and assessing the current financial health of your organization, we can identify the areas in which your business is excelling and the areas that may need improvement.
Our Fractional Sales Manager Jesse Mahle guides your business on how to add more clients, increase the frequency of purchases, and promote cross-selling services. And our Fractional COO John Olenick analyzes your financial statements and operations to determine whether increasing your prices make sense—and/or if you need help managing your overall expenses.
If you have questions about how to grow your business while increasing profits, call Sebastian Lane Consulting at 443-534-6783 or email us at jesse@sebastianlaneconsulting.com to schedule your free consultation.