Business owners know that closing a sale is crucial to the growth and success of their company. And many small business owners wonder if there is something specific they can do to increase sales, which leads to more cash flow.
No matter what you are selling, picking the right strategy can help you increase sales and gain a loyal customer base for your business.
If you are selling something that consumers purchase a few times a year or even annually, in order to increase profitability you
- Increase the number of sales or transactions,
- Increase average ticket value, or
- Reduce cost.
Your business model and what you sell, whether it’s a one-time item or a frequent service, will determine your highest priority (Increase revenue or reduce costs) and will also determine your marketing mix. Let’s assume your model requires you to continuously grow – and you’ve got the rule of 72 on your mind!
Increase the number of sales or transactions.
In order to increase your cash flow, you have to increase the number of sales or transactions in a given period. Hypothetically, the more transactions you have, the more money you make, all other things being held equal. How? If you’re a small business owner or sales person, establish relationships, gain trust, and increase your true reach to more potential customers. You don’t have to be a connector, but you do need to have a professional network. Certainly focus on your digital marketing, social media, website, Local SEO, & digital advertising strategy – and anything else that generates leads.
Increase average ticket value.
Isn’t much of sales about pain points & trust?
When you have gained the customer’s trust, they will be more open to increasing the size of their purchase. In some cases, you can “upsell” the customer, or you can “cross-sell” them by offering additional products or services that might compliment the item or service they have already decided to purchase.
Be strategic when planning to get your customer to buy more – certainly don’t waste much time outside of your core competencies.
Reduce costs.
Maybe sales isn’t your forte & having a sales team isn’t in the cards. Reducing costs also can increase profitability, but only if sales prices remain constant. If cost reductions result in a lowering of the company’s quality, then the company may be forced to reduce prices to remain at the same level of sales. If a company can reduce costs by optimizing the supply chain, manufacturing operations, personnel and facilities without having an impact on quality, sales price or sales volume, a clear path to higher profitability exists.
Profitability is the name of the game.
Market investments outside of investing in your own business can be super limiting in regard to having a game changer ROI on your capital – that’s why most business owners have the majority of their wealth tied up in their business.
Remember, work toward the right side of Robert Kiosaki’s CashFlow Quadrant. That’s why conceptualizing the “Rule of 72” is so important in doubling the growth of your money.
Remember in order to improve profitability stay committed to all or a mixture of the following: Increase Sales, Increase Ticket, & Reduce costs.
If you follow these simple rules, your business MIGHT increase its cash flow, and you MIGHT get more market share, and you might retire early, and you might have something worth passing down/selling to the next generation – and if you’re like me – I take that MIGHT over the alternatives.