What guide do small business owners need to grow a profitable business?
Did you know that only 40% of small businesses are making a profit? If you’re hoping to do better, you need a set of strategies for increasing revenue. And you need to be proactive about assessing your processes to find opportunities to improve.
Stay with us to discover the small business owner’s guide to growing a profitable business!
Nurture Customer Loyalty
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If you want to start increasing revenue, you need to grow your customer base. How do you grow your customer base in the United States? You start by creating customer profiles. With these, you can map out the demographic information of those most likely to purchase your products or services.
Then you’ll be able to craft more targeted social media marketing campaigns. You can narrow an ad’s audience to women under 40, for example. Or people in a particular state in the U.S.
You can as well offer incentives, like coupons, to loyal customers. This will help keep them engaged — and encourage word-of-mouth referrals. Another simple and effective way to nurture customer loyalty is to give them the first look into new products, services, deals, etc.
Nurturing customer loyalty can guide you in growing a profitable business, no doubt. There are statistics to back it up. According to research done by Frederick Reichheld of Bain & Company (the inventor of the net promoter score), increasing customer retention by 5% boosts profits by 25% to 95%.
After nurturing customer loyalty, the next thing you need to do is to start using software for analytics and reporting.
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Use Software for Analytics and Reporting
How does your small business track transactions and cash flow? If you don’t have automated processes, you need to invest in changes. With the right software, you can make financial projections that will help you stay ahead.
Turning to a spend management platform like Bento can streamline your accounting procedures. You won’t need to rely on reimbursement red tape that diverts time for more critical tasks.
Using software for budgeting and forecasting can help you build a more organized business. As a small business owner hoping to grow into a large business, you can’t afford to trivialize the importance of using a sales automation tool.
How do you identify the best software for analytics and reporting? The best software for analytics and reporting allows users to create actionable reports in minutes from any data.
From the information gathered from the reporting tool, it’s time to make a better decision. The first line of action is to start trimming unnecessary expenses.
Trim Unnecessary Expenses
When it comes to expenses, stay vigilant. It’s easy to drop a lot of money on overlapping management platforms or marketing strategies. Or you might be spending too much money on space you don’t need.
Hold quarterly meetings with key stakeholders to review expense reports. Cut unnecessary subscriptions or shop around for better quotes on mass-produced products you need. You may be able to leverage one quote against another to score a better deal.
Develop Contingency Plans
What is a contingency plan? A contingency plan is a strategic plan created by executives or management to help a company tackle business risks.
Make sure that your business plan is armed with backup plans when things aren’t going smoothly. In other words, prepare for the worst-case scenario. Even the most profitable business will hit some bumps in the road!
Strategies can include lining up backup vendors if you face a supply chain problem. Or it can include creating an account with funds you only access in an emergency. Devote time to learning how to create a small business emergency fund.
When writing your contingency plans, be sure to make them simple, unique and in plain language.
Build Partnerships with Other Businesses
As a small business owner, you need to build your brand. When you align yourself with complementary — and not competing — brands, you generate visibility.
For instance, if you run a coffee shop in Broad Street, Richmond, Virginia, USA, partner with local florists or artisans. You can feature a rotating line-up of arrangements, photographs, or products. Or offer discounts on products from their shop when a customer buys a specific coffee blend or beverage from your business.
Keep business cards by your check-out counter. Of course, ask that the partnering business reciprocates this gesture!
So long as you both share the same values and clearly state each other’s roles, your partnership will stay on course. And when your partnership is on the course, it will be the perfect guide you need to grow a profitable business in America.
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Grow a Profitable Business Using this Guide
When you commit to clear accounting procedures and assessments, you can start increasing revenue. Growing a profitable business means investing in marketing and growing partnerships. You’ll generate more buzz about your brand and develop your financial reserves.
Need more tips for growing a profitable business? Come back to find new articles!