5 Ways to Increase Revenue in Your Business Today
As most consumers tighten their purse strings, small business owners are feeling the pinch. With the economy still stalling, experts are predicting a turnaround soon, and “indicators” are indicating that it’s going to happen. But it’s very hard to make payroll with indicators. Somehow, people still want to be paid with old fashioned cash, and as a business owner it’s your job to keep cash flow flowing. So when people are spending less, how can you get them to spend more?
What is your lowest selling product? Get rid of that product line to save on wholesale purchase costs and free up the inventory space for an item that moves. If you’re not in retail but service instead, eliminate the lowest performing service. But before you do, write up a quick press release announcing the “death” of the product at your place. Make it fun and funny and turn it into an event. Host the “WAKE” on a Saturday, decorate for a funeral, put the employees in black, and prominently feature handmade signs and epitaphs regarding the product or service. If you have a website (and you need a website, announce it prominently to your house list) and host a special event selling the product. “Come say good bye to XXXXX forever!” Then sell off the product using special pricing or a sale. Whatever remains gets paired up with a higher ticket item to create a bundle.
Which leads us to cash flow secret number two. Bundle your products or services for a discount. This is the same principle behind “Want fries with that?” or “Would you like an extra large for only a quarter more?” The customer is in your store or using your service (or searching for it). Bundle your items and shout out the savings. You’re not losing a percentage of the second sale, you are increasing the percentage of the first sale. If a box sells for $10.00 and you sell bundle two boxes for $17.00, you increased the profit by 50% on a zero transactional cost (if the wholesale price is $5). Or the customer gave you two additional dollars on their purchase and you spent zero extra dollars in acquiring the customer purchase. Sounds complicated, but it’s really simple to pair complimentary items or services.
The third way is to increase the price of your items or services. Unless you are participating in a price war, your customers won’t leave, IF you are providing remarkable service with a remarkable product in a unique way. If you aren’t doing any of those things, then begin immediately, it’s no wonder your business isn’t working in this economy! Increase your prices by 20% and see what happens. If you make doing business with you a pleasure and an experience, the only thing that will happen is your cash flow will increase by twenty percent.
If your business is dull, boring and ordinary start turning it into an event destination. By increasing your customer’s desire to visit your location, you increase the transactional possibilities. Think about car dealerships that added internet café’s, grills and kids amusement parks to their lots. There is one dealership that advertises the best burgers in town. People drop by on their lunch break. No one buys a car every day, but the dealership is getting visitors used to stopping at the lot so that when it’s time to purchase a new car, guess where they’re going to go. Plus they’ve added an income stream for when car’s aren’t moving. Big Box retailers are doing this as well. Wal Mart has hair salons, McDonalds, Banks, and several other stores in their locations. What can you add to your business to increase cash flow? It may be renting space or facilities or adding revenue streams, but it can have a dramatic effect on cash flow.
Finally the best way to increase cash flow is to make it impossible for people to live without your service or product. How can you be the “utility” bill in their life? What can you do with your product or service to make people turn you from a want into a need? Often it’s just positioning, so take some time to define how you are positioned in your community and your customer’s lives. Become the one thing they can’t “live” without and you will increase cash flow because they will have to visit you. No one needs Starbucks coffee at all, yet many diehard fans will not give it up, sacrificing in other areas so they can continue that habit. How can you become a habit? How can you become a need? Find those secret spots and you can ride out the rest of the recession in relative comfort, and be prepared for the upswing when it occurs soon.