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9 ways to Increase Profits
For many business owners, they work hard, potter along with the everyday tasks, and for many businesses, they haven’t looked at their margins in quite some time.
You’ll find loads of advice on having a website or an offer, an option to buy online; all needed for certain types of retailers as we know. How about though for the everyday retailer who maybe just wants an extra bit of cash to play around with, is there ways to increase profit with ease that won’t add cost or huge effort?
Here are 9, quick ways to increase profits margins
- Choose products wisely – Are you offering a product that are not selling? This is taking up shelf space, space that could be used to host a new market offering that people want and need.
- Increase prices – We don’t mean to hike up the cost of everything in your store, but check if there’s areas where you may be undercharging or could get a bit more back without overcharging people.
- Use discounts wisely – Don’t give discounts when you are stuck for money, but to entice customers in at a quiet time of year. Plan, so your customers know when this promotion is on and be adamant to make sure you’re not going to lose out by giving too much away.
- Cut waste – Get as much out of the staff and resources you have without paying for more. Just be careful not to overwork your staff as they are a great asset to your business.
- Be smart with scheduling – Do you open at 7:00 AM but not get busy until 9:00 AM? Don’t have all your morning staff on at the same time if not all are needed. On the other hand, if the weekends are busier, don’t have the same amount of staff on as during the week. Always ensure however that you have enough staff on, people don’t have patience and long wait times can lose you customers.
- Use as few suppliers as possible – The more suppliers you deal with, the higher the costs of deliveries and accounts admin. When you buy from fewer suppliers you may get a better deal on pricing and, you will build a relationship which may allow free shipping or even exclusive offers. Adding another benefit in the form of reduced cost of admin. Ensure though that the suppliers are providing the best products for your customers.
- Know your stock levels – A knowledge of the levels of stock you have in your store is essential, knowing what, when and why to order products to ensure stock on hand is used. This cuts back on storage space needed (warehousing) and most importantly for perishables. Waste due to spoilage is also reduced drastically.
- Figure out where your losses lie – Do you have a high amount of losses that are unaccounted for? Figuring out where these losses are in your business will go a long way in increasing profits.
- Use a new stocktaking method – A shameless plug from ourselves! But why not consider changing from the slow and outdated method of stocktaking to a digital format with Digitally? no pens, no paper, no excel & no double entry! Everything is in the palm of your hands, instantly ready to count, sync and report on. It can save up to 68% of time, allowing your business to focus on other areas that need attention. Less time spent stocktaking, is more time spent making profits. Read more on the Benefits of Digital Stocktaking vs Paper Methods.
General Rule of Thumb Reminders
If it’s waste – Find ways of controlling this, account for everything thrown away or used by employees so every item used is accounted for.
If it’s theft– Find out who the culprit is. It could be your customers, staff taking stock or giving discounts to their friends, incorrect pricing or overcharging from suppliers.
Once you have figured out where your highest losses are coming from, plan to combat this. This could be employee training employees, installing cameras or something else. Have a read of our blog on Top 5 Most Common Stock Management Mistakes for more ideas on how to combat losses.
Consider when the best time to carry out this evaluation of your profit margins is, we would advise to do this after you have carried out a stocktake of your full premises. Start afresh, go forth and boost profits!