In a recent interview, leading CPA, Keith Huggett, founder of Next Level Accounting & Tax in Roseville, CA, revealed his top 5 tips to increase profit margins in a small business. —
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When asked to comment, Huggett said, “Increasing your bottom line is no easy task, but there are a couple of steps you can take that can translate your five-year business plan into profit.”
Boosting both the number of customers leads and conversion rates will increase a company’s bottom line.
“If you can get more people who are interested in your business to purchase your product, then you can dramatically increase the company’s profit margins. Increasing lead conversions relies heavily on the functioning of your sales department,” he said.
“Make sure to examine every step in detail to see where the sales process can be improved; even implementing small changes can go a long way to doubling sales.”
But, Huggett warns, be wary of raising overhead costs in acquiring new customers.
"Spending too much on drawing in more customers will undercut your profit-generating efforts and will begin eating into your profit margins. Instead, you should constantly be looking for ways to cut marketing and promotion costs," he said.
One great way to reach new customers and boost profits, Huggett says, is through customer referrals.
When asked to explain, he said, "Use an existing customer base as a resource that can send new customers in the market to your company. This can be done by executing a referral system that has been proven to work.”
He also suggested that if a business operates in a niche market where it’s harder to gain new customers, then it's important to work toward increasing the sales from existing customers.
“The concept here is straightforward: sell more to the customers you already have. However, putting this into action might be more complicated. For this, work on shifting your sales pitches slightly to get your customers to purchase your products more regularly,” he said.
Raising your prices in line with market expectations can also be a boon for profits.
When asked to explain, Huggett said, “Research has shown that businesses can bump up the prices of their products up to 10% without receiving a negative reaction from the market – that is, as long as you deliver on quality and customer service. In other words, a small price hike won’t scare customers off.”
Name: Keith Hugget
Email: Send Email
Organization: Next Level Accounting
Address: 983 Reserve Dr, Roseville, CA 95678, USA
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