Every small business owner wants to make more money. However, when it comes to increasing revenue, entrepreneurs sometimes struggle to come up with ideas that don’t involve a sizeable financial investment. While it may be true that you have to spend money to make money, here are seven options for boosting your bottom line without breaking the bank:
1 – Rent out part of your space.
Do you have extra office, retail, or warehouse space that is rarely or never used? You can generate additional income by renting it. There are plenty of small businesses that can put your idle conference room or the empty second floor of your shop to productive use. Sharing space with a complimentary business will also give you the opportunity to cross-promote each other’s services and attract more customers. To further increase the revenue from your rental space, consider offering amenities such as computer workstations, printers, a coffee station, or shared administrative services.
2 – Cut expenses.
Small business owners know that spending less is a surefire way to make more money. However, cutting expenses does not mean having to count every paper clip. Start by eliminating services and subscriptions you no longer use. Then focus on service contracts that may not have been renegotiated for some time, such as your Internet, utilities, and insurance. Negotiate with vendors who may be willing to lower payments on their products or services, or find lower-cost suppliers.
Another way to reduce expenses is to eliminate costly services you may be offering to your customers. Examine your perks and consider those you can cut back or discontinue altogether without any loss of customer satisfaction.
3 – Consider value-added services or products.
Launching a new service or product line can be a costly proposition. However, many small businesses can make more money by adding related products or services that their customers or clients would be willing to pay for. For example, a store that sells pet products could offer a grooming service. A financial services firm can conduct a workshop series on smart investment strategies during tough economic times. A spa might carry lotions, scrubs, and scented candles.
Invite your team to brainstorm ideas for value-added services or products that are simple to cross-sell to your customers. You won’t need to invest in expensive research, testing, or marketing to generate additional revenue.
4 – Buy new equipment.
Every small business needs equipment to operate. Having the right equipment can improve your processes, reduce the risk of costly errors, and have a positive impact on your bottom line. Because purchasing or upgrading equipment often involves a major capital investment, it’s important to fully assess your company’s short- and long-term objectives and be strategic about what you buy. Determine whether or not the new equipment will increase your productivity, help you stay ahead of your competition, or contribute to greater success in the marketplace. If the answer to any of these questions is “yes”, it could a worthwhile investment.
Keep in mind that you can tap into your equipment as collateral for a loan to increase your cash flow. As an add-on product to an Asset Based Loan or Invoice Factoring Loan, Summit Financial Resources can provide equipment term loans to help speed your growth by adding availability to your existing working capital line of credit.
5 – Convert leads into paying customers.
Improving your ability to turn interested prospects into paying customers is one of the most effective ways to make more money. Depending on how full your sales pipeline is, it might be time to focus on converting some of these leads. Launch a sales push with incentives for your team to close outstanding deals with new clients or up-sell current clients. Offer a limited-time deal for first-time customers to entice them to try your product or service now. Focus on improving key areas of your sales process, and don’t skimp on ongoing training for everyone in your company who interacts with customers. Increasing your conversion rate from one out of ten to two out of ten can double your sales and increase profits.
6 – Expand your market.
If you have tapped out your local market, you may want to consider expanding your trading area geographically. Although this strategy will likely incur additional costs for staff and office or retail space, the long-term benefits may be well worth it. It’s a good idea to develop your target market before expanding. Identify a specific customer base and work to build sales and loyalty. Remember that it costs more to develop new customers than to retain existing ones, so be sure to balance potential growth with efforts to maintain your current customer base.
7 – Mind your margins.
Profit margin is the gross profit that you make from the sale of each product or service. By continually seeking ways to raise the price or to lower the cost of your product or service without decreasing the quality, you can increase your profits per sale. You may need to continually shop around for the best distributors in order to purchase materials at a lower cost per unit and take advantage of quantity price breaks. There may be a cost benefit to purchasing more up front and tightening your belt elsewhere to get a better long-term return.
Many savvy small business owners who need a quick infusion of working capital know that financing can be a smart short-term solution. Whether you need to purchase raw materials, upgrade equipment, or pay for additional staff training to increase sales, Summit Financial Resources can help. We offer working capital loans for small to medium-sized businesses that involve using your accounts receivable and other assets as collateral.
We can mix and match from a variety of flexible financing options, including invoice factoring, asset-based lending, inventory lending, and equipment financing. We are not regulated like a bank, so we can respond quickly to the changing needs of your business and expand your cash flow in a matter of days or weeks, not months. Summit Financial Resources sees the infinite possibilities in your business, and you can count on us to help you seize opportunities to generate revenue today – and for years to come.
Working Capital Financing is a few clicks away.
Summit Financial Resources specializes in working capital financing for small to medium-sized businesses that need increased cash flow. We provide working capital financing through invoice factoring, asset-based lending, inventory lending, and equipment financing.