4 Strategies to Increase Sales and Revenue For Your Small Businesses

‘Designing Strategies’ Newsletter

July – August, 2014 Volume 11 – Issue 60

OK, let’s admit it. Every small business owner, regardless of the field he or she is operating in, wants to make more money. Who doesn’t want to increase sales and revenue? No one that I know. There are a lot of different reasons someone might want to increase sales and revenue for their small business.

Sometimes it’s no more than just wanting to move the business to a higher level. Maybe it’s time to add more staff or equipment, both of which require more money. Costs of doing business rise on a regular basis. Maybe it is one of those horrible moments when we wonder if we’re going to be able to cover our monthly expenses.

Every time we look at those financial reports, our hope is that the bottom line has increased. We wait for that wonderful moment when that number changes from red to black. A small increase is good, but a significantly larger figure on the bottom line is always a welcome sight. Woo-Hoo! We are elated. We feel pride in having achieved our goal to increase sales and revenue – and profits. This is the stuff that justifies business celebrations.

How You Can Increase Sales and Revenues

How can you go about increasing that bottom line? There are a number of ways, but how do you choose the best option for your company? In reality, ways to increase revenues and profit aren’t as numerous as you might think. The truth is, there are really just a few major ways to elevate your bottom line on an upward trajectory.

Seemingly, the easiest ways are to simply raise prices, cut quality or cut quantity. None of these are likely to keep existing customers happy without clear reasons for the changes. A lot of good customers can be lost through these approaches without a well formulated plan of communication with them.

No one is ever a fan of increased prices. Depending on the amount of the raise in price, customers may decide the new cost of your product or service is not worth what you ask. Cutting quality usually involves using lower priced materials that cost less. Couple lower quality with a higher price and you will end up with a fair number of unhappy customers. Cutting quantity can be risky. Yes, you might create a shortage of your product, creating a demand that allows for higher pricing. Or, customers will look for a comparable product or service elsewhere.

Strategies to increase sales and revenue

Increase the number of customers you serve. Pretty simple, isn’t it? More customers times more sales equals more revenue. Ideally, it will also mean more profit. Depending on how you go about getting more customers, profitability can be affected. Whether your profitability is affected in a bad way, or in a good way, depends on your strategy to get the job done.

Increase sales to existing customers. Suppose your customers each purchase one of your wildly, wonderful widgets. If all things remain equal: staffing, production materials, administrative costs, distribution costs, sales can still be doubled. By simply getting each customer to buy just one more widget, your firm can double revenue and profit. If customers hire you for one project or service, you can add additional scope to the project, increasing the sale amount and increasing revenue.What additional ‘accessory’ product or service can you add to up-sell what you are already selling each customer? A retail furniture store I worked for decided that selling a table lamp was one thing. To increase the sale, every customer was offered light bulbs with their purchase. The bulbs weren’t priced like a Walmart special, that’s for sure. But, the convenience of having a bulb at home when they plugged in the lamp added value. You don’t need a complex strategy, just something to increase each sale.

Reduce costs to produce your widgets or deliver your service to customers. Locate less expensive sources of materials, labor or distribution to create those wonderful widgets. Research less expensive products and solutions to sell to your customers. Either strategy can result in a higher rate of profitability per unit or per project. The key to this strategy is maintaining the quality level customers have become to expect from your firm.

Do what you do better than anyone else. Become the go-to company for whatever it is you do or produce. Add features that none of your competitors have thought about. Solve customers’ problems and challenges better than the rest of the field. Make yourself indispensable for customers. People are more than happy to pay a specialist more than a generalist.

What strategies can you implement to make this simple goal of increased revenue or sales a reality? It comes down to two basic components: “Increase income” and “How?” Build that ‘better mousetrap’ we’ve heard about all of our lives.

The last option on our list above – do things better than your competitors – is the most open area for developing strategies to increase sales, revenues and profits. Put your creative juices on High and encourage your people to switch to an innovative mindset.

Find new and better ways to serve your existing customers. Attract prospects who appreciate what you have to offer them. Use strategic thinking and planning about how to increase sales and revenues. Formulate a Sales System for your firm. This should be part of your everyday way of doing business. Think strategically, plan strategically and operate strategically.