Small businesses don’t have to be small or un-profitable forever. Corporate history shows that companies that began small—at homes or even garages—burgeoned to become large, multi-national corporations. For example, KFC began from a small restaurant in Corbin, Kentucky in the US and now ranks as the world’s fourth largest food franchise chain. Colgate toothpaste traces its origins to a humble candle factory in New York City. Airbnb, started by two people on the brink of financial disaster and living in shared accommodations, is now the world’s foremost accommodations and holiday company.
If someone has done it before, you can too.
Striking It Rich
Understandably, times have changed since KFC delighted palates of Corbin residents and Colgate helped New Yorkers improve dental hygiene. Globalization of economies and mushrooming start-ups mean that small businesses now face stiffer competition than ever before.
Small businesses are often constricted by insufficient funds for advertisements and cutting prices to compete with established brands sometimes means lower profits. In these cases, small businesses often find it difficult to strike rich. Regardless of the situation you find yourself in, here are a few simple steps that you can take to make your small business more profitable.
Tip 1: Leverage Social Media
Thanks to the Internet, you have access to free social media websites and apps including Facebook, Twitter, Instagram, as well as other sharing platforms like LinkedIn, Pinterest, and YouTube. The rise of TikTok stars and its algorithm it places on content creators makes it the ideal platform to exponentially grow your business presence (via the For You Page) quickly.
Make your presence felt in the market on these websites and apps. With some creativity and thoughtful planning, you can create engaging and attractive social pages that will not only boost the awareness of your business and personal brand, but also be a place for you to connect with your customers. Instead of only creating content (like these companies), use your platform to respond to comments. Don’t be afraid to add some humour, so long as the engagement aligns with your brand and its mission.
Facebook and Twitter also help receive consumer feedback that’s vital for improving your products and services or curbing damage control caused by any adverse publicity. Instagram and Pinterest allow you to post images of your products while LinkedIn facilitates Business-to-Business (B2B) contacts. You can upload informative videos of your small business and its offerings on YouTube along with testimonials of satisfied customers.
Tip 2: Amazon, eBay, and Others
Launching your own online store is a great idea but can be quite costly for a small business owner who is just starting out. It also involves massive logistics and tie-up with banks for receiving payments. Further, you need to have a great returns and refunds policy. Not to mention you have to keep all these things in mind while trying to popularize your online store through expensive advertisements.
Instead, make your small business more profitable by signing up as a supplier with e-retail majors such as Amazon and eBay, among others. In the US alone, Amazon attracts over 187 million visitors per month. People looking for a product similar to yours will also be able to view your merchandise. Your small business can really benefit from Amazon’s logistic chain management and payment systems to remove some of the pain points and headaches that may come along with the “do it yourself” approach.
Tip 3: Network Marketing
Network Marketing or Multi-Level Marketing is not for large corporations only. You can make your small business more profitable using these time-tested and proven methods. Invite housewives, retirees, students, and people who wish to earn an extra income in spare time to enroll as your network marketers. Of course, you will have to part with some commission for network marketers, but the cost will be little when compared with the volume of sales you can generate.
There are few precautions you need to take before offering your product or service through network marketing. Firstly, you will require a modest supply of your product to ensure you can fulfill orders taken by network marketers. Secondly, you would most likely have to provide samples or tester packs to the network marketing team. And thirdly, you will have to train network marketers about the salient features of your products and selling techniques.
Tip 4: After-Sales Service
Poor after-sales service to customers is the bane of almost every small business. Small businesses often lack resources that larger companies have while hiring a skilled after-sales service crew. In such cases, look for people who are willing to work part-time or moonlight for you to earn extra cash. Also note that while your product may meet and exceed internationally accepted standards, there will always be clients who will find reasons to complain or may face genuine issues with your product or service.
You can keep track of all your client information, their purchases and billing information, as well as invoice them right within the TrulySmall Accounting software. We make it simple for you to ensure that you are on-top of your pre-sales and post-sales service. Excellent after-sales service generally translates as great word-of-the-mouth publicity for your business. In most cases, such positive feedback by users made to friends and relatives, encourages them to patronize your small business leading to more profits.
Tip 5: Innovate
Innovation is the key to success for any small business. SuperJam, started by a Scottish teenager, who went on to become a teenage millionaire, is a great example. Schoolboy, Fraser Doherty, made jams using traditional recipes from his grandma that he sold at community halls and small stores. Doherty began innovating his products by maximizing fruit content of the jams. Customers always look for higher
quality products at the right price, which is what lead to him improving his jams.
Depending upon the nature of business and expertise you possess, continue innovating and improving the quality of your merchandise or services. Always think bigger and if possible, one step ahead of your competition so that you’re not keeping up with the curve—you’re getting ahead. This attracts more customers and eases the marketing process.Armed with superior quality and reasonably priced products and services, you can make your small business more profitable. Innovations and improvements can help your small business compete at par with giant players in the market.
Beware of Complacency
Many small business owners falsely believe that there is no further scope for expanding their business. These business owners fall prey to complacency which occurs primarily due to lack of sufficient funds or incorrect understanding of markets. Some small business owners wrongly think their products will not be accepted outside of the market they currently operate in.
Once you make your small business more profitable, getting money through crowd funding platforms, venture capital or loans from bank and other lenders becomes easier. There are several ways to raise money for your small business. This can help you expand your product and service offerings, and venture into areas outside your home turf.
An old proverb states: “The only limits are the ones you set yourself.”
You can easily overcome these self-made limits by adopting marketing strategies that will popularize your products and services in distant markets.
It is worthwhile to remember, every business begins as a small enterprise. Entrepreneurs nowadays have access to modern technology and tools that can exponentially improve the awareness of their brand as well as products. In most countries around the world, logistics chains are also well defined and readily available to you. Given these current conditions, it is not difficult to increase your business profitability as long as you know how to take advantage of it.
Blunders to Avoid
Often, small businesses commit blunders that may result in low profits. These include:
- Under pricing your product or service to overcome competition. Doing so severely damages your brand reputation as consumers will view it as inferior, due to low price.
- Not using a catchphrase. Great catchphrases can define your small business and attracts clients. It is a myth that catchphrases are only for large companies. General Electric adopted its catchphrase: ‘We bring good things to life,’ much before the company made its mark across USA.
- Improper branding. Select a brand name for your small business that is easy to remember and attracts attention. Some great examples are Pampers brand of diapers. Parents pamper their newborns and hence, the brand is easily remembered. Energy drink brand Red Bull signifies that it gives bovine-like energy to consumers.
- Comparison with rivals. Doing so is a colossal blunder. It signifies you have no confidence in quality of your product. You can expect retribution from the competitor, who may be financially better positioned. Inadvertently, your brand will be seen as a substitute for the competitor rather than standing upon its own merits.
- Wrong packaging. If you are selling a product, the first thing that attracts customers is the external package. However great the contents may be, buyers will shun the stuff if the packaging does not appeal to their aesthetics.
Small Steps To Making A Big Impact
As mentioned earlier, entrepreneurs now have access to endless resources to make their small business more profitable. Using the proper accounting software can help make managing your transactions and billing your clients easier while allowing you to see exactly what your business’ current financial standing is. Try TrulySmall Accounting today for free and see how easy it can be. With the proper tools and some creativity and effort, you can make your small business a highly profitable venture and possibly enter the big league.