How do you increase business profits?
Answer the following questions carefully, and you'll have a good start.
Can you increase the average sale?
A restaurant with 25% profit margins might make 50% on additional sales to existing customers (less labour to bag one large order than two smaller ones). Asking "What would you like to drink (fries) with that?" works, and it's just a start.
What's the least expensive way to get a customer?
Before you spend another thousand dollars advertising to get new customers, could you get as much business by spending a few hours contacting previous or existing customers?
What low risk ideas can you try?
A Restaurateur once sent a letter to several visiting basketball teams, inviting them to visit our restaurant, and giving the coach a free meal as an incentive. The cost? Two dollars. The payoff was two busloads of customers. At that rate, you could increase your business profits even if nine out of ten ideas fail. In our own case, a small gesture on a With Complements Slip ultimately resulted in the arrival of one of our largest and interesting clients.
Have you tested prices?
If a business that sold a product for a $1.05, which cost them $1.00. At a price of $1.20, it is doubtful that they'd lose half their sales, but if they did, they'd still make twice the profit. Some things even sell better at a higher price. There are ways to Test your price points.
Can you measure your advertising results?
How do you know that you're not spending more for a customer than they're worth? Coupons, customer surveys and other methods of measurement are a must. Even just ask them, how did they found you?
How do you know your customers are satisfied?
When you had your worst restaurant meal you ever ate, did it go down without a comment, but I'll bet you never returned to that restaurant. Maybe the owner should be talking to the customers.
Can you enhance the perceived value of your product?
Years ago, we know of someone who sold walking sticks for $10 at flea markets, and $20 at craft shows. Sometimes location alone can enhance the perceived value of a product. What else can you do? Have you thought about differential pricing?
What are similar businesses doing?
See what your successful competitors are doing. Can you do the same? On the other hand, what are your customer's complaints about your competition? There is double the value in this!
What other products can you sell?
There's a reason stores have sweets and magazines near the checkout. Extra sales are a great way to increase business profits.
Can you use your customers as salesmen?
Word of mouth is a start, but what other ways can you get your customers to bring their friends to you?
These were culled from a longer list. We call it "stolen business ideas," because we can't credit the original authors. We took them where we found them over the years, with gratitude.