9 ways to Increase Profits

When was the last time you looked at your Profit Margins?

It can be so easy to keep sucked into the day to day tasks in our businesses that we forget to keep a close eye on this margin. Keeping on top of this number and constantly looking at ways to increase it is crucial to the success of your business, so let’s look at some quick ways to increase profit margins in your business today. 

Here are 9, quick ways to increase profits margins

1. Choose products wisely – Get rid of products that are not selling. They are taking up shelf space, space that could be used to host a new market offering that people want and need.
2. 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.
3. Use discounts wisely –Plan, so your customers know when your promotions are on and make sure you’re not going to lose out by giving too much of a discount.

4. 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.
5. Be smart with scheduling – Do you open at 7:00 AM but not get busy until 9:00 AM? Make sure that your roster reflects this. Always ensure however that you have enough staff on, people don’t have patience and long wait times can lose you customers.
6. 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. Ensure though that the suppliers are providing the best products for your customers.
7. 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). Waste due to spoilage is also reduced drastically.
8. Figure out where your losses lie – Do you have a high amount of losses that are unaccounted for? Maybe they are a result of waste or perhaps theft is playing a role? Track everything thrown away or used by employees so every item is accounted for. Monitor theft, this 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, 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.

4. 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.

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!