The Only 5 Ways To Become More Profitable
1) Get More customers to buy the product/service
The first one is straight forward, get more people to buy from you. When you have more volume, you have a high turnover and consequently higher profits. Do make sure that you have a healthy margin though, because the game of volumes can quickly turn unprofitable on razor thin margins.
2) Get the customers you have to buy from you more often
This involves setting up a system where the same customers buy from you more often. This can in be in the form of a recurring billing system or a contract but the objective is to make sure customers buy from you more than once. The more you can do this, the greater the profits.
3) Introduce new products/services
At some point you will hit a saturation point if you are selling just one product/service, even if several customers are buying it regularly. At this point it is important to introduce new products or service. In order to reduce the risk of the new product/service not selling well, try to make it supplementary or complimentary to the existing high selling service instead of introducing something completely unique. This can greatly increase your profits. You can introduce something completely unique if you can keep the costs of product development low and can take the losses if the product doesn’t do well.
4) Increase prices of products/services
One of the simplest ways of increasing your profit is to simply increase the price of your product/service. This maybe hard if you are selling a commodity with no differentiation or have a lot of competitors competing on trying to offer the lowest price possible. However, if your product/service has some differentiation/uniqueness of value to the customer, that may justify a higher price. When you raise your price, it is possible that some customers may leave and that may depend on the elasticity of demand for that product. However many customers will stay, especially if they are convinced of your value and them paying higher will now bring you more profits even if the number of customers decreases slightly.
5) Enter a different market
The final thing you can do to increase profits is to enter a different market. This can mean several things. If you are targeting specific industries, now you may try to sell to other industries. If you selling only in particular regions, you may expand to more regions. If you are selling only in one country, you may now target other countries. Again, similar to launching new products/services mentioned in point 3, expanding in markets that are most similar to the market where you are already selling well is the best bet to lower risk. This means target similar industries and regions so that the predictability of your success is higher and so are your profits.