{"id":364,"date":"2022-02-01T12:17:33","date_gmt":"2022-02-01T12:17:33","guid":{"rendered":"https:\/\/wealthiereveryday.com\/?p=364"},"modified":"2022-03-15T11:00:00","modified_gmt":"2022-03-15T11:00:00","slug":"ways-to-increase-profitability","status":"publish","type":"post","link":"https:\/\/wealthiereveryday.com\/ways-to-increase-profitability\/","title":{"rendered":"4 Simple Ways to Increase Your Businesses Profitability"},"content":{"rendered":"\n

In this post we are going to go through some things you can do to increase the profitability of your business. These are simple things that can have a huge impact. <\/p>\n\n\n\n

Don\u2019t go over your head though, one might work in one business but is harder to go through in another. Your business situation is always unique, so think carefully before making major changes to your business.<\/p>\n\n\n\n

When I talk about increasing the profitability of your business, I mean to increase the part that stays as profit. Not just increasing sales. Sometimes increasing profits might lower sales a little bit, but if it is worth it, don’t worry. Now, let\u2019s dive right into it.<\/p>\n\n\n\n

1. Increase prices to increase profitability<\/h2>\n\n\n\n

Increasing prices is probably the simplest way to increase the sales of your business. If done right and not too much, this can help your business flourish. Rising prices slightly on a yearly basis, for example, can be a good way to stay up with inflation, without scaring your customers away.<\/p>\n\n\n\n

Don\u2019t lift the prices too much. This can make your customers go to your competitors if they have choices on the suppliers. To make sure your customers will stay with you, even after a slight increase in prices, you should keep your relationships with your customers as good as possible. Take care of the customer service of your business, that is the face of your business.<\/p>\n\n\n\n

Even if your product was slightly more expensive than competitors, customers might choose you, because they know they will always get good service from you. Deliver at scheduled times, and if you are late, make sure to give a reasonable explanation.<\/p>\n\n\n\n

When rising prices, you can give a heads up to your customers on that. You might want to write an email to them, saying that you are rising prices by 3% for example, because of the rising prices of raw materials. Whatever is the case, this will probably make your customers understand your situation better as well. Don\u2019t rip your customers off. The best deals are the ones where both sides are happy.<\/p>\n\n\n\n

2. Lower costs to increase profitability<\/h2>\n\n\n\n

Lowering costs can be slightly more difficult than rising prices, since the prices you have to pay are not always up to you. However, there are some things you can still do. If you use a lot of electricity, you might want to ask for offers from other providers as well. Make sure to let them know, how much electricity you use, and that way you can get a better deal.<\/p>\n\n\n\n

Buying raw materials can be another thing you can save on. Just with simple email to your supplier can save you few percent on your costs. Another way is to again, ask for offers from different suppliers as well. <\/p>\n\n\n\n

If there is choice among the suppliers, make sure to ask for their prices regularly. The world is changing fast, and even if one supplier was more expensive a year ago, that might have changed by now. You can save a lot with just a simple email that takes 5 minutes to write.<\/p>\n\n\n\n

Last thing on my list to lower the costs is to go through your yearly expenses. There might be some expenses, that were necessary when you first started, but have now become somewhat useless. Go through your expenses every year, and make sure you are not paying for something that doesn\u2019t bring value to your business.<\/p>\n\n\n\n

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3. Expand your business to increase profitability<\/h2>\n\n\n\n

The third way on the list is simply to expand your business. Well, that might not be as easily done as said, but think about it. Some costs are fixed, and no matter how big you grow your business, they will stay the same. By expanding, you probably also will get better deals from suppliers, if your business does a physical product.<\/p>\n\n\n\n

Fixes costs can be for example:<\/p>\n\n\n\n