Five Break-through Ideas to Immediately Increase Profits and Improve Cash Flow

Too often in business we get trapped into reviewing our sales numbers without analyzing the all important "profit" number. This is commonly referred to as the "bottom-line" of a business. There are various ways you can dramatically impact your profitability.

1) Under Pricing Kills Profits!

Many small businesses have thinner profit margins than larger firms do because they tend to under price their products or services. So why not just raise prices? I know the feeling--you're scared that your competition might swoop in like a bird of prey and your customer base might shrivel overnight!

If you have thought about raising prices but haven't done so, let me give you an example that may give you the confidence to do so. My client, Steve Lopes of Stanley Steemer based out of Edison, NJ had a positive experience from raising prices about a year back. After giving me much resistance to my advice to raise prices, Steve agreed it would be prudent to test it. The result? Sales and profit went up for the month in which he raised prices and Steve was pleasantly surprised at the little, if any resistance he got from his customers.

Since then, Steve has increased prices 2 more times. What happened to sales and net profits? Sales surged by 25% for that 12-month period and net profits for that same period skyrocketed by 84%. Since Steve's sales are in the 7 digits, these sales and net profit increases equate to very significant numbers. Best of all, it allows Steve with a lot of extra cash to do things he wanted to do in his business and personally.

Still unsure about raising prices? Remember, you can always cut them back. More likely then not, you'll be surprised at the positive impact it'll have on your business, assuming of course you continue to provide the same or better level of service to your customers.

2) Is The Marketing Working?

Make your advertising accountable.

You've probably heard the familiar maxim: "Twenty percent of my advertising brings in 80 percent of my business, but I don't know which 20 percent!" I see that as a common problem with many small-businesses. They don't track their marketing to know what's working, what's not. This problem stems from a bigger problem and that is not being aware of the difference between institutional and direct-response advertising.

Institutional advertising, also known as image advertising, is all about you, the business owner. How great you are, your qualifications, years in business, "full-service" product line, etc. It's the most common form of advertising. You see institutional ads every day in print or in TV. They're often cute, creative, funny, utterly ineffective and not trackable. Simply put, an institutional ad has no way to track results and is there to keep the company name in front of the public.

By contrast, direct response advertising is all about your customer and his or her needs. Its purpose is to stimulate a phone call, letter or a visit. Best of all, unlike an institutional ad, it is trackable so you can make every dollar you spend on it accountable. This then helps to measure the effectiveness of each ad.

3) The Easiest Way To Profits

Keep a lid on spending! Resist the urge to spend freely. You may like the way a lavish office and expensive furniture looks, but does it really contribute to your business? In some businesses, a fancy office is critical; in most it is not. I once had a small business owner who spent $5,000 on his front office desk in a business operation that had no "office visits." Needless, to say, this business owner did not survive too long in business due to this and other extravagances. Get as much value out of every transaction, whether you're leasing office space or stocking the kitchen.

Important caveat: Don't compromise when it comes to spending money on your own self-development. Small business owners don't give this enough importance and thus spend far too little money in this area. This is a big mistake. As an example, in the next 5 weeks, I'll be attending three conferences across the country and investing about $4,300 in seminar tuition fees, travel and boarding. Not a small chunk of change you would agree, but in my opinion, well worth the investment. You are the most important asset in your business. Take good care of you.

4) Have You Got A Back End For Every Sale?

Most small-businesses ignore the easy money to be made with a back-end sale. Yet, the really smart business owner never forgets that the most profitable words in the history of business were: "Would you like fries with that?" I have read that these words instantly doubled the total sale.

Your biggest expense is reaching a new customer. If you succeed to winning him over to the point that he pulls out his wallet and gives you money. . . he will often continue to give you money if you offer something else. Yet, you do not need any expensive advertising to do this ? he's already listening to you. You simply have to open your mouth and offer him something else.

Savvy small-business owners will have something more expensive to sell, and something less expensive. Something else that fits in with whatever the initial sale was. . . and something else that just has broad appeal. But they will always have something on the back-end.

5) Outsource Judiciously

One of the battle cries in business today is to determine the one thing that your business does best, become even better at it, and outsource absolutely everything else. There is certainly a lot to be said for taking a careful look at every function in your business and asking yourself if you should outsource it. But take a hard look at the numbers before you decide to jump on the outsource bandwagon!

Salim Omar, CPA is the author of the newly published book, Straight Talk About Small Business Success In New Jersey now available in Barnes and Noble bookstores and on

More free information can be accessed on his website

In The News:

pen paper and inkwell

cat break through

How to Find a Microenterprise Loan for Your Business

If you're looking for start-up capital for your business, but... Read More

Smart PR Tactics for Small Businesses

Small businesses need Public Relations, possibly more than large corporations,... Read More

Not Listening Can Hurt Your Small Business

Most small business owners seek advisors who can help them... Read More

Business Scents - Do They Work?

You see it often in large shopping complexes. Customers seem... Read More

Home Based Franchise; What About Future Expansion?

As a franchisor I am always asked by new and... Read More

Starting a Small Business: Balancing Risk and Reward

In a perfect world, starting a small business would be... Read More

Small Business And The Ability To Find Market Place Opportunities

Marketing is one of the four corner-posts of a solid... Read More

Increase Sales in Your Home Business With These 10 Simple Ideas

Every home business has the same problem of how to... Read More

New Habits, Rebounding Economy Help To Sell Giftware and Collectibles

Just a few years ago, when one thought of a... Read More

Finding the Right Virtual Assistant for Your Small Business

Articles abound advising the business community how to properly screen... Read More

Tell Me a Story: A Simple But Powerful Tool to Build Your Business

Everyone loves a good story. Whether it's the story of... Read More

How to Profit from a Concrete Roof Tile Business

Concrete Roof Tile Business: During the 2004 summer season, storms... Read More

Small Business - Big Business...Whats the Diff?

Small Business, Big Business ? What's the Diff?Well a lot... Read More

Want to Grow Your Business? Make an Irresistible Offer

My clients and many of my readers are small and... Read More

Youll See It When You Believe It - Growing Your Business from the Inside Out

What unspoken message are you sending your clients and customers?... Read More

How to Achieve Real Success in Business: Five Breezy Tips

Achieving real success should be the goal of any good... Read More

Three Ways to Add Leverage to Your Small Business

Remember those drawings from science class of how a lever... Read More

Its Spring - Time For A Compensation Program Tune Up

Now that winter has passed, the annual ritual of spring... Read More

Are You Using a Chess or Checkers Small Business Marketing Strategy?

Until the day I learned to play chess I loved... Read More

Todays Chef, Tomorrows Restaurateur -- Startup Tips by Restaurant Consultants Inc

Researching information for a recent business plan, I came across... Read More

Concrete Cleaning Discussed at World of Concrete Expo 03

If you are in the pressure washing business and are... Read More

How to Sponsor an Event for Fun and PROFIT

How do you sponsor an event and get personal introductions... Read More

Politics, Environmental Rules, and Mobile Car Washes

During the California Recall Election, I was very interested. Without... Read More

To Buy A Fat Pig

What does buying a fat pig have to do with... Read More

Racing the Competition

What is the Big Race all about when it comes... Read More

Lubbock TX Good Market for a Service Business

We very much like what we see in Lubbock, TX... Read More

Loose Lips Sink Ships - The Fastest Way to Put Yourself Out of Business

I agree that knowledge should be free, but the next... Read More

Building Your Business for Success in 2005

It's a strange anomaly.Most people who set out to start... Read More

Sex Up Your Business Growth

A top executive called up me late in the night.... Read More

Look Like Sizzle, Be The Steak

You've heard marketing and advertising gurus quip, "Sell the sizzle,... Read More

Pressure Washing Business and Post Fire Cleanups

Many have not experienced a fire up close. One year... Read More

11 Things Small Business Owners Can Learn From The Miracle On Ice

1. Know Where You're Going ? Coach Herb Brooks had... Read More

Franchisee; Vacation Managing

Do you own a franchised business? Over 400,000 franchised businesses... Read More