The essence of any commercial business is to make a profit for its investors while sustaining its employees. Businesses that fail to uphold this basic principle do not get very far before being dissolved. Unlike other types of ventures, businesses require resources to run. They require energy and investment in time just to serve customers everyday. It beats logic that a business with such expenses can operate for very long without a profit, or balancing the revenues with the expenditures in the least.
The following are four ways through which you can increase revenue for your business and make more profits:
- Increase the number of transactions for every customer
- Increase the number of customers
- Raise the prices of the goods that you’re selling
- Increase the size of each transaction monetarily
Number of transactions
If you increase the number of transactions that take place between your firm and every customer, you will realize a boost in revenues. For instance, your company might be accustomed to one transaction per customer every week. You need to figure out a way to raise the number to two or three for every customer (on average).
If you do this, you will beat your competition without breaking a sweat. One common approach is to offer complimentary products on your store. For instance, if you sell flat screen television sets, consider selling Android or Apple smart boxes. You may also decide to sell movies on the side. Using revenue recognition software, it is possible to determine the change in revenues upon the application of such as a plan.
The number of customers
Perhaps, this is the commonest approach used by businesses seeking to increase their revenue margins. Many companies are focused on increasing the number of customers who purchase products on a routine basis. Interestingly, this approach is one of the most difficult ways to increase revenue since it involves luring the customers of your competitors to cross over to your side.
Some companies may go to the extent of engaging in illegalities with the aim of taking away customers from their competitors. You need to on the lookout for such foul players who will go to the extent of attacking your online servers. They do not play fairly, and so should you. Focus on augmenting your offering such that your rival’s customers flood to your company naturally. This is how your increase your share of the market.
Raise the prices
You could be making little revenue by charging too little on your products. You need to realize that there is a balance between charging too low and too high. It is better to strike the balance. If this is difficult, try to stay on the higher side of things. Your customers will inform you directly or indirectly whether you are too expensive. Unfortunately, they will not tell you when you are selling your products or services too cheaply.
For this reason, you need to ensure that you undertake thorough market research before setting the prices for your good or services. What should you do if your prices are already about the same as the market averages? Well, raise them. You should expect some backlash from your customers and a few goodbyes. However, you can mitigate this by adding a few more features to the product to rather justify the change in price. Your customers will appreciate this and may not leave you.
The size of the transactions
Lastly, you can expand the average size of a transaction that a customer can have with the company. This may take various forms with the commonest one being a limitation on the purchase amount. Consider a situation where your supplier offers you a huge discount for buying in bulk. If you can get your customers to purchase in bulk as well, you can increase your revenues and profits by a huge margin.
There are several costs involved whenever you need to breakdown a product into smaller pieces. Packaging, shipping, and holding costs are just but a few of them. You might consider phasing out some product sizes from your company to enforce this. However, ensure that your understand your customers fully. In spite of this discussion, remember that your success factor will be measured by your profitability, not your sales.