Too often Idaho businesses get trapped into equating sales with profits. Yet there are many other ways you can dramatically increase your profitability.
Underpricing Kills Profits
Many small Idaho businesses have thinner profit margins than larger firms because they tend to underprice their products or services.
- Many people will choose to pay a higher price for products or services because they are local and from a smaller business that cares.
- Always find ways that make your Idaho business better than large national companies and increase your price to reflect higher quality.
Is the Marketing Working
You must always track your marketing efforts. There are so many older Idaho companies that have been blindly spending thousands of dollars with outdated marketing techniques. You should focus on how to get your business name and message in front of a very targeted group of people.
It’s often by eliminating the marketing expenses previously considered most sacred that you gain the most.
- Wrap your company vehicle with your brand and message, then park it where targeted customers are.
- Send out very specific mailers to targeted customers.
- Write articles, blog or create videos that only potential customers will engage in.
- Sponsor contest, sporting leagues, or causes that targeted customers will also see.
- Work daily on organic materials for your website. Over time you will no longer need to pay for advertising if your website is coming up on the first pages of most search engines.
- Participate in google, yahoo and bing’s map places. This will ensure that your business comes up on the map when someone is searching in your area.
The Easiest Way to Profits
Let’s say your overall profit margin is 5 percent, but if you can cut your costs by just 5 percent, your profit will almost double.
To attack your costs, review every single expense item, starting with the biggest ones.
- Get competitive bids for every product and every service that you buy.
- Often lease rates, mortgage rates, and utility rates can be negotiated downward, especially if the market has shifted.
- Don’t price too low.
- Quickly drop any marketing that isn’t working.
- Slight cuts to overhead can send profits soaring.
- Focus on the most profitable products.