Your firm, especially if you’re small, is your baby. But like a baby, you are responsible for all of its needs. That includes the small stuff—admin, email, bookkeeping, etc.—and the big stuff—creating value for clients, sales and business development, scaling your company, etc.
To boost profits, you know you need to grow your client base and/or sell more services. But all of your other responsibilities leave little to no time for that. So how do you assess, prioritize and execute on measures to make your firm more profitable, without neglecting the million other items on your plate?
This article can help. Like you, I’m a business owner who wears more than one hat: I juggle the big and small tasks of running a startup, all while mapping out the road to greater profits. Here are the tried-and-true tactics I’ve found that produce results.
Learn to Think About Profitability in the Right Way
Before you adopt profitability boosting tactics, think about this challenge correctly. According to marketing and business master Jay Abraham, there are three major ways to grow and become more profitable:
- Increase your number of clients.
- Increase your transaction size.
- Increase client purchasing frequency.
Now that we have a blueprint to becoming more profitable, let’s unpack each strategy and how to execute it.
Increase Your Number of Clients
You’re likely pretty busy servicing the clients you already have—and that doesn’t leave a lot of time for business development. But you can still grow your client base. It just means you have to be smarter than the better-funded competition when you prospect for new business.
Here are a few ways to increase your number of clients, even when you don’t have a ton of time for prospecting:
- Attend to your web presence. Your firm’s website is your storefront. A website should be more than pretty; it should enable customers to browse and shop with ease, just like an actual storefront. Your site should make it clear and easy for prospects to find A) all relevant information they need to make a purchasing decision and B) a clear way to request or purchase your products and/or services.
- Target prospects where they are with what they want. Once you have a site to drive prospects back to, attract them with free, valuable content. This content should help them A) do their job better or B) complete more easily the projects they hire you to be involved in. Give content away in exchange for their email address. And if they’re a good fit for your services, automate a simple email drip campaign that offers more value for free. In the campaign’s final emails, convince them to take action.
- Make it easy to refer your services. Offer discounts to current clients in exchange for referrals. Hand out freebies to anyone who spreads the word about your services. Whatever strategy you choose, make it easy and profitable for others to refer business your way.
Increase the Transaction Size
Pricing is an art and science that many people fail to master. Raising prices, if possible for your business, is a serious challenge that requires careful consideration. However, it’s a worthwhile step to consider: even a small bump in pricing can result in large profit gains over the year.
But if you’re reluctant to raise prices because of market conditions or other obstacles, there are ways to functionally increase transaction size without changing your pricing structure:
- Identify your 80/20 tasks. The 80/20 rule or Pareto principle states broadly that 80% of the result comes from 20% of the actions taken. This law holds true across a mind-bogglingly diverse array of industries, businesses and activities. It likely holds true for your business, too. Identify which 20% of your services or tasks create the majority of profits. Upsell these tasks, devote more time to them, or devote fewer resources to other tasks.
- Get more efficient at key activities. Shaving a few hours off key business activities, whether billable or non-billable, increases your firm’s ability to spend time on higher profit activities. It also increases margins as wasteful or costly activities are minimized.
- Outsource or automate time-consuming actions. Automate or outsource tedious, basic or time-consuming tasks so your firm focuses more time and energy on profitable activities. Tasks ripe for automation or outsourcing may include: bookkeeping, admin, email communication or scheduling. Here are a few resources that will get you started:
- 13 Handy Business Automation Tools for Extremely Busy People
- Tim Ferriss’ The Four-Hour Workweek on Outsourcing Business and Life
- 9 Clever Ways to Automate Your Small Business with IFTTT
Increase Client Purchasing Frequency
Increasing purchase frequency can be tricky. You may asked yourself, “How do I increase the number of services my clients buy, especially if they’re constrained by budget or have limited goals, like designing a logo or coding a website?”
The answer is simple—By doing what you do best: get creative. Consider how to increase purchase frequency from two client groups:
- New customers. Is your website, pricing structure and product suite optimized for customers to buy the most possible? Consider offering discounts for larger service packages, discount extra services or cross-sell between related services. What value propositions or competitive advantages can you use to justify raising prices for new customers?
- Existing customers. How can you get people who have bought once to buy again in less time? All of the strategies you might use for new customers could work here. Also, carefully consider how you can (with investment in your firm’s talent) offer related services to the ones you have now. For example, anyone with the right resources can learn effective email marketing. That could be an additional service you offer on top of current offerings to design landing pages. That way, clients not only receive a professionally designed landing page, but a custom drip campaign to go with it.
Better profits mean happier owners and principals in firms. I should know: the days I make my firm more profitable are far and away the days I smile more!
I hope these tips start you down a path to increased profitability. More importantly, I hope they help you see that increased profitability can happen on top of your other responsibilities. And that is most certainly something to smile about.
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