High Profit Business
Entrepreneurs often ask, “what is the most high profit business I can get into?” It is better to ask, “what does it take to make a business highly profitable?” In every industry there are small businesses that make little or no profit, there is the majority that makes average profits and then there is the small percentage who make ten times (or more) the average profit of the industry.
One characteristic of business owners who make ten times the average profit is that they do not follow the crowd. They simply don’t do what the rest of the industry does.
Let’s look into it…
You won’t hear the owner of an insanely profitable small business say “no, the customers won’t pay that price!” Instead, you hear them say, “we worked hard to discover how we could charge more …how we could package in more value so that it was a no brainer for our customers. Once we achieved this our profits skyrocketed!”
In the remainder of this article, I am going to explore some important concepts that can help you to transform the profits in your own business or a business that you may someday acquire.
More profitable business
Think of the cockpit of a jumbo jet. There are lots of levers, dials and switches. When the pilot adjusts these controls, the plane behaves differently. It goes up, down, sideways, depending on the controls changed by the pilot.
A business has similar controls. Just like the pilot, a business owner can adjust those controls and change the trajectory of their business. Ultimately they can control the profit level of their business.
Unfortunately, many small business owners are not aware of these controls, or the controls aren’t calibrated and there is no measure of the business’s performance in certain key areas. As such business owners work very hard while being oblivious to changes that they could make that would enhance the profit and rewards they receive from their business.
A small business needs a dashboard or control panel just like at the front of a jumbo jet (albeit, not as complicated as a Boeing 747!) Once the business owner has this accurately calibrated control panel, they can make informed decisions on where they will put their investment of time and money to improve their business.
Much of the control system can be developed from data from the businesses accounting system. This data includes average customer spend, customer purchase frequency, gross profit margin, net profit margin, profit per job (depending on the set-up of the accounting system) and even customer retention.
Other data elements will need to be recorded and reported by the team or drawn from other business software such as CRM. (By the way, if you are having trouble with team commitment and performance read this article on team management.) This data includes numbers of enquiries from different advertising sources, conversion rate overall and per salesperson, billable hours per person and so on.
If you’re reading this and thinking “wow it will take me all year to develop the systems to collect all of that data!’, don’t worry. Start with what you have. Ask your accountant to help you draw meaningful data from your accounting system and keep an eye on the numbers of leads and the conversion of those leads into sales. Regularly reviewing data from these areas alone will help you generate a host of improvement strategies for your business. These strategies will be incremental and something that you can easily fit into your busy days and weeks at your business.
Profitable Small Business
Here are nine easy-to-implement strategies to help you increase sales and profits in your business immediately. You don’t need a graphic designer, you won’t need to spend any money on printing… in fact, you won’t need to spend any money at all. These are simple, yet impactful, strategies that can be implemented at no cost to you.
These strategies use carefully crafted and highly influential messages – either spoken or written. The scope of this article doesn’t extend to the psychology of persuasion used. However, by the time you finish this article, you will be beaming with ideas to quickly improve the profits in your business.
The idea is to enhance what you are already doing as well as add just 1 or 2 new strategies. This way you can get off to a flying start and implement in a timely manner.
Here are the nine profit-boosting strategies…
1. Be on purpose. There is no other strategy that will increase your perceived authenticity and power than being on purpose! If you’ve ever felt uncomfortable explaining what you do or selling yourself or your product, get prepared for that to all change… for the best!
2. Develop a USP and Guarantee it. USP stands for Unique Selling Proposition and it tells people the best thing they get from dealing with you. It tells people in a single sentence the best reason to use your company. It is a proposition, not a slogan. A guarantee works gangbusters due to the principle of Risk Reversal. These are both tremendous strategies to help convert people that are buying you or your product for the first time.
3. Use Headlines. 70% of the success of any marketing (offline and online) is due to the headline. Think of your headline as the ad for your marketing piece. It attracts attention and draws people in. Write (or rewrite) headlines for all of your marketing elements. Also, use powerful sub-headlines throughout your marketing piece. Skim readers should be able to get the gist of your marketing piece by skimming the headlines. Also, treat the subject line of your emails as a headline too in order to increase open rate.
4. Use Action Plans not Quotes. A quote only encourages the reader to focus on the price and compare your price to other suppliers. Providing you’ve qualified your prospect really well, you’ll have ample information to structure an inviting Action Plan that will compel your prospect to buy. Once you have a template for your action plan, much of it can be reused over again. This will convert better than traditionally formatted quotes and proposals.
5. Write Your “7 Best Reasons” with Testimonials. This is a catchy headline that grabs people’s attention. The list of 7 reasons can be used in multiple places – bask of business cards, website, action plans or as a sheet on its own. Each reason is written like a headline so as to be of maximum appeal.
6. Prepare Top Quality Questions. The quality of information you elicit from a prospect comes down to the quality of the questions that you use. You’ll convert from your sales meetings at a much higher rate if you use top-quality questions. The IDEA’s formula is the key to this. The answers that you are given to these high-quality questions will show you exactly what you need to do to win the sale each and every time. You can start changing the results from your sales meetings immediately.
7. Administer Pain Relief To Your Market. People are researching their purchase decisions nowadays more than ever. Prospects are pushing salespeople out of the front end of the sales cycle. But they still want quality information on how they can solve their problem and relieve their pain. In addition to this they want a supplier who understands their issues. This is where your expertise comes in. When you package up all of your knowledge, hints and tips in easy to digest information packets… prospects will start seeking you at. This is the new art of Information Marketing.
8. All Contacts… All Products/Services. To maximise repeat purchase, cross-selling and referrals all of your contacts need to be fully aware of your full range of products and services. So many small businesses suffer from being the best-kept secret in town. A simple “Menu of Products/Service” letter sent to all of your contacts will help greatly with repeat purchases, cross-sales and referrals.
9. Powerful Offer. You have to give people a reason to buy. Whether you are touting your services at a networking event or preparing a detailed proposal for a client, your offer is what they buy. Make it powerful, package it well.
Conclusion
Just about any business can be made to be more profitable. It comes down to the business owner being prepared to not run with the pack. Data on the performance of the business is also important. This data needs to be available on a weekly and monthly basis so that decisions can be made and implemented quickly relating to enhancing the business’s profit.
As outlined above, there are a host of low cost/no-cost strategies that a business owner can use to start improving and growing a businesses profits.
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