Are you wondering how to make a profit? Read this article to learn tips to make your small business profitable and a success.
According to the Small Business Administration, about 80% of small businesses survive their first year. But beyond that, things get tough for many small business owners.
Only about 45% of small businesses can surpass the five-year mark. And once the ten-year mark hits? Only about 30% of small businesses are still around. This illustrates just how difficult it can be to keep a small business up and running.
If you want to avoid having your small business close within just a few years, it’s important to learn how to make a profit. Turning your small business into a profitable venture might seem simple enough—just sell more stuff, right?—but it’s not always as easy as that.
Here are five tips to increase the chances of your small business being profitable in both the short and long run.
1. Make Sure There’s a Strong Need for Your Small Business From the Start
When you’re first thinking about opening up a small business, it’s important for you to do market research. You should look at the local market and see where your small business will fit in and, more importantly, if it’ll fit in at all.
There’s nothing wrong with having a few competitors in your market. Competition is a good thing for everyone in the world of business.
But you don’t want to start a small business that sells a particular product or service that a dozen other businesses are already selling in your area. You need to find something that your small business can sell that will set you apart and make you a unique option for your customers.
2. Price Your Small Business’ Products and Services Right
As a small business owner, you want to make the prices for your products and services low enough to entice people to come and check you out. But at the same time, you don’t want to make them so low that you’re not making any profits.
It’s very important for small business owners to crunch the numbers and figure out how much they should sell their products and services for. They should be competitively priced, but they should also be priced high enough to generate profits for your company.
It’s great to have people coming through your front door and showing an interest in your products and services. But it won’t do you much good if you’re not making money off every single sale.
3. Find the Most Effective Ways to Market Your Small Business to the Masses
Your small business can sell the best products and services in the world. But if you don’t know how to market them and, to a larger degree, if you don’t know how to market your small business, it won’t even matter.
There are so many ways to market a small business in this day and age. You can:
- Take the traditional route and advertise your small business in local newspapers and on local radio and TV stations
- Go with the more modern approach and market your small business through social media marketing and email marketing campaigns
- Come up with great guerrilla marketing ideas and market your small business in a cost-effective way
Whatever you do, don’t pass up on the chance to do something to market your small business. Marketing is one of the most important aspects of running a successful small business.
4. Create a Sense of Loyalty to Your Small Business Within Your Customers
There is a reason why a lot of small businesses are able to stay open for at least a full year. They’re able to find ways to convince customers to come and visit them one time, which allows them to make a profit at first.
But what happens when first-time customers visit a small business once and then never go back? Businesses start to make less and less money each year until they’re no longer attracting new customers and, therefore, no longer profitable.
If you’re trying to figure out how to make a profit, remember this: You need your customers to come back and patronize your business over and over again to turn a consistent profit. You can’t rely on new customers keeping you afloat.
It’s why you should make an effort to build up a sense of loyalty to your small business within your customers. You can do this by creating loyalty programs for your customers and by forming personal connections with as many customers as you can.
5. Get Into the Habit of Evaluating Your Small Business Operation Every So Often
Over the course of time, you’re going to need to change your approach to running your small business on a regular basis to ensure it remains profitable. Just because it was profitable during your first five years doesn’t mean it’s going to stay profitable if you don’t change with the times.
You should do what you can to learn more about the latest small business trends while heading up your company. You should also evaluate everything from your prices to your employees to see which changes you should make to squeeze the most profits possible out of your operation.
Businesses that refuse to change over time don’t last as long as they should. Don’t be afraid to take a step back every now and then to see what improvements you can make to your small business to increase your profits.
Learn How to Make a Profit to Help Your Small Business Stick Around
It’s not always going to be easy to figure out how to make a profit while running a small business. It’s the challenge that comes along with starting a business from the ground up.
But by following the tips found here, you’ll give your small business a better chance to stick around for the long haul. You’ll also find that your small business will be able to bring in more money while building up a loyal base of customers in the process.
Check out our blog for more informative articles on running a small business.