Increasing Your Bottom Line
Everyone is interested in growing their business on a regular basis. In fact, comparing amounts of money the business generates over a certain time period is one of the ways in which you can measure the success of your business as a whole.
The bottom line refers to the amount of profits made after every expenditure has been deducted.
For an individual small business owner, this is the money that you make off of the business in a year. Let’s take a look at a couple of different areas where a business can increase its bottom line.
The Customer-Based Approach
The main contributors to your business’ success are, of course, your customers and clients. The biggest increases in your bottom line will therefore be the result of practices which bring in more money from these individuals.
A couple of big areas to consider here:
- Increasing prices. If you think you can raise prices without losing customers, it’s one of the easiest ways to up your profits.
- Gaining more customers. This method takes a little more work, but is similar to diversifying a stock portfolio: the more you have, the better your chances of weathering a storm.
The Overhead Approach
The other important area to look at when you want to increase your bottom line is your overhead.
These are all the different places where you spend money, usually in order to help your business succeed. Most of these areas are vital to the business but there may be places where you can cut costs and therefore make more money at years’ end.
They include marketing, employment, supplies, and so on.
Obviously, all of these measures need to be explored in greater detail. We will take a look at how to increase prices and other topics mentioned here in future articles; in the meantime, think of how these measures can be implemented within your own small business.