Every business must turn a profit to thrive, grow, and mature.
It’s easy to make such statements. But how do you translate them into actions? When you already feel overwhelmed by operational tasks, you might struggle to carve a clear path toward consistently raking in profits, especially as a small business owner.
Throughout my years of business financial consulting, I’ve noticed how numerous clients struggle to get a bird’s eye view of their limitations and opportunities without some professional assistance.
I translated what my experience in small business consulting taught me into a brief guide to help you consider new, innovative pathways to increase profits, cut costs, and push your brand to thrive among its competition.
Take these tips from Susan Giddings Consulting to transform how you operate your small business for the better.
Identifying Areas for Cost Reduction Without Sacrificing Quality
First and foremost, you must cut the fat. Find out where invaluable resources go and determine if those investments are integral to your business’s performance. Those resources might include cash or time, energy, and effort. I have dealt with this numerous times as a fractional COO.
Let’s explore some potential avenues you might eliminate or change to reduce costs:
- Utilities: If you run your business from a central location, you can perform energy audits to determine where and when you use the most electricity, gas, or water. Then, adjust your utility needs if possible.
- Equipment: Does your business require devices, 3D printers, or other machinery to produce products or services? Inventory how much of this equipment you actually use regularly and what it costs to upkeep.
- Subscriptions: Like many small business owners, you might purchase service or product subscriptions to keep your brand functioning. For example, many businesses schedule social media posts via a management service. You might discover a free alternative or find that you can eliminate that subscription altogether.
- Product materials: If you source materials for physical products, could you find a cheaper alternative? New businesses frequently crop up, creating new avenues to save money.
Strategic financial planning involves saving resources where you can with less expensive alternatives that don’t impede customer service, productivity, or product quality.
Exploring and Testing New Revenue Streams
One of the best pieces of professional business finance advice you’ll ever hear is to expand your cashflow opportunities. That means seeking and identifying new methods to pull income into your business or expand your current customer base, including from someone like me who does small business consulting. As a busy small business owner with a lot on your daily plate, you might gawk at this idea.
However, allowing your business and staff to surprise you can become one of the greatest delights of business ownership. For example, you own and operate a small boutique in a local storefront. You carry vintage but trendy items that appeal to people with some extra cash to burn. How could you expand what you offer while staying on brand?
You could explore:
- Personalized fashion consulting: Help new and current customers learn what styles and clothing options work best for their body types, complexions, and personalities. You could provide this service in person and online.
- Online boutiques for thrift finds similar to your inventory: Reach a target demographic with similar tastes but a lower budget by hand-selecting clothing and accessories from thrift stores and shipping them out when purchased.
- Sending outfit boxes: Customers pay one flat rate for you to choose a whole outfit based on a questionnaire they complete.
These ideas would require a similar skill level as running your physical storefront. Get creative with what you offer and who you can attract.
Developing and Implementing Dynamic Pricing Strategies
You can’t just slap a price on a product and call it a day. As a provider of expert financial consulting services and small business consulting, I can tell you that even pricing your products and services requires a plan. A pricing strategy looks something like this:
- Learn the overall cost of producing a product or service, including time, energy, and material costs.
- Find what competing businesses charge for similar products or services.
- Determine how your target audience feels about the industry’s status quo for pricing.
- Identify the most effective price points within your industry. For example, some prices tend to cultivate more interest, even if they are a little higher.
- Test various prices to learn which ones hit home runs.
We can fine-tune your pricing strategy together during a business financial consulting service.
Utilizing Customer Feedback To Refine Products and Services
Your current customers come with a wealth of free, untapped information. They can help you identify and resolve problems with service experience, product purchases, and other business aspects. Everyone has some area in which they can improve—your brand is no different.
How can you easily obtain and leverage customer feedback to make your brand and products more appealing? Try these suggestions:
- Glean customer reviews: Look through the reviews you currently have and document the ones with constructive criticism.
- Request more customer reviews: Offer discount codes in exchange for reviews from current customers who haven’t offered their feedback yet.
- Trade value for survey answers: Can you offer short free trials or product samples? Exchange those for more in-depth surveys from select customers.
- Converse on social media: Your customers likely interact with your brand on its social media profiles. Keep track of comments for potential criticism and respond to questions or concerns to learn more.
A financial management consulting expert who specializes in small business consulting will also find customer feedback helpful in refining your business operations and streamlining your product approach.
Analyzing and Improving Profit Margins
Finally, explore areas where you could increase the value your business pulls in. You should track cash flow long term to get a big enough picture. Then, you can further tweak your approach.
Before implementing any of the above-listed corporate financial advisory recommendations, find where your profit margin currently sits. This will give you an idea of what your business presently brings in. Then, set realistic goals with a fractional COO that include:
- A specific timeframe: Let’s say you crunched the numbers at the beginning of the year. You could reevaluate your waste reduction and profit margin within three to six months.
- The amount of savings you’d like to achieve: Identify the primary areas of waste and eliminate them. Calculate how much you should save from these actions by the end of the timeframe.
- The rise in profit margins you want to reach: How much money do you want to bring in? Set a goal and craft a plan that puts your goal within reach.
- Other areas you can adjust to help meet your goals: Next, consider what happens if you can’t meet your predetermined goals. This doesn’t necessarily mean failure. It means a new opportunity to improve your business operations and customer satisfaction levels with secondary areas of improvement.
- A general financial strategy: Finally, explore how you will reach your profit goals. A revamped marketing strategy? Replacing subscriptions and services with less expensive alternatives? Create a step-by-step plan to achieve the numbers.
The Role of Market Research in Boosting Profitability
Your insights should come from more places than current customer reviews and feedback. You also need in-depth market research to predict the next steps your business should take. A thorough research campaign should:
- Explore new avenues to meet new audience members where they are.
- Identify your top competitors and how they establish trusted brand authority.
- Examine your audience’s pain points within your industry and how you can solve them.
- Point out frequently forgotten audience sectors that you could attract.
Market research nicely pulls your profit plan together for sustainable business growth.
Success Stories of Small Businesses Turning Around Their Profitability
How does comprehensive corporate finance guidance work in real-world settings? Let’s look at what some of my small business consulting clients have to say.
Sometimes, viewing and reviewing your business gets stale. Valerie Morris, owner of Eugene Yoga, says, “She helps me see my business through a new set of eyes and develop strategies to avoid paralysis by analysis.” My services helped her become a better business owner with a new “kernel of knowledge” during each session.
Frederico and Paulette Guinart are the knowledgeable owners of Guinart Construction. They struggled with business stagnation and solving problems despite their high skill level and industry experience. Working with me “brought clarity to the issues that have been stagnating our general contracting business.” I also identified “effective solutions to make the company far more profitable.”
I helped Nicole Henn of Park Avenue Cleaning “turn a corner” in profitably investing in her business and paying herself. She says she succeeded by “following her steps and using her tools.” I have a wealth of resources I can offer you, too.
The Bottom Line
Profitability serves as every business’s lifeline. Broadening your network to obtain fresh insights can put your business on a fast track to sustainable growth. Let’s work together at connecting the dots and creating a plan together through business financial consulting services.
Let’s Talk Money With Business Financial Consulting at Susan Giddings Consulting
The path to greater profits begins with you. Take the first step by contacting Susan Giddings Consulting. I’m ready to help you get the EDGE you need with a free consultation for small business consulting from a fractional COO.
