10 Ideas How to Increase Your Profit Margins

The Loch Ness Monster

You know that sales, alone, aren’t an indication of your business success. The true measure of success is your business profits.

Alas, for most small business owners – profit is a little like the Loch Ness Monster. They’ve heard of it, but never seen it.

Increasing your profits doesn’t require drastic measures. Even small changes in a few areas of your business can give your bottom line a big boost.

Here are 10 ideas you can use to increase profits in your small business:

1. Get More Leads and Market to Them

Whatever you do to collect contact information and reach out to prospective clients – do more of it. Promote on your website and in your social media channels free, value-packed lead magnets will get you more leads to add to your mailing list marketing.

2. Convert the Leads You Already Have

You need to have a strategy and a plan to follow up on EVERY lead – hot, warm or cold. And you need to keep following them up, delivering value and encouraging engagement – until they get to know you, like you, and trust you enough – to buy from you.

3. Add New, Related Products

Offering your existing clients valuable and relevant new products or services is an easy way to increase the size of orders and attract more clients. Ask your current clients what types of products or services they would like to see, then create them..

4. Increase Your Prices

Most small business owners undercharge… The right price for your product or service is as much as the client is willing to pay (but not more than that). How do you find it out? By experimenting. Keep increasing your prices, until you start seeing a decline in your sales figures.

5. Increase Order Size

Use upsells (e.g. get another one for half the price, get a maintenance contract, or a recurring supply) or cross-sales (e.g. if you sell a therapy or a workout session – offer vitamins, supplements, stretch bands, or other equipment) – in order to increase the order size. You collect more revenue without the added costs of sales and marketing.

6. Add Recurring Income Streams

An important type of product or service you should create and promote is anything that can be sold once, but you get paid for it every single month… Subscriptions, memberships, product of the month program, refill of consumables… the sky’s the limit.

7. Cut Expenses

Increase your profits margin by cutting expenses like switching to a cheaper supplier, buying less “stuff” or reducing staff or staff hours. Every cent you save is a cent you earned.

8. Fire Some Customers

Not all customers are great for business. If you have a customer who is costing you more than it brings, or negotiating prices that are unreasonable, then maybe it’s time you fire the customer.

9. Eliminate Non-Profitable Products

Products or services with higher profit margins are the most important for your business. You must concentrate all your efforts on them. Identify the products or services that don’t contribute to your business, see if you can improve them or if removing them is a better choice.

10. Increase Your Return on Investment

You should evaluate each marketing method you are using to see which is paying off the best. It might be time to eliminate one or two marketing tactics to focus more on the top one or two that give you the greatest ROI.

Now It’s YOUR Turn

For five minutes… come up with as many ideas as you can… how can you increase your profit margins?

Let's Brainstorm

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Please share your ideas (all of them or just one) in the comment box below… and let’s get WOWing.

Live fully, stay awesome,

Nisandeh Neta

Let's Brainstorm

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Mins
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Please share your ideas (all of them or just one) in the comment box below… and let’s get WOWing.

Live fully, stay awesome,

Nisandeh Neta

  1. - Try to find partners who can add to your products so you can deliver a broader range, but still make it relevant for your customers.
    - Dare to share with others and ask them how they are selling. The same as we do here. You always get ideas.
    - Mostly as an expert you are much further than your client, that is why they come to you. Often you tend to take large steps in your offers, programms, etc. Try to cut them in smaller pieces and you have new content to share or a new product to sell.
    - Ask your customer what they need from you. Perhaps this provides you with a new insight and a new product.
    - Write a book about your expertise. This way you share you knowledge and you get income.
    - Read reviews/ comments and try to get them. This way you know when you are most relevant. That way you can make a new product.

  2. Find partners to do joint purchases.
    Reduce your travel costs and make online appointments more often.
    Take into account travel time.
    Deliver customers to other companies and receive 10 percent of the turnover for this.
    Ask acquaintances of customers to purchase services or products together, so that everyone gets a discount.

  3. 1) Automate recurring tasks to save time you can invest in helping more clients.

    2) Focus and develop your expertise. This way you need less time to perform the same service. The result for the client should be the same (if not better) so the price will stay the same (or increase) too.

    3) Schoenmaker blijf bij je leest. Do not spend time on stuff that someone else (cheaper) can do as well. You will waste time if you try to do these things yourself.

    4) Provide package deals so you can increase the avarage order value for your clients. preferrably the package contains something that does nog cost you any more time of money for an extra client.

    5) Start training others to do your work. There is only one of you, but you can make duplicates for certain jobs 😉

  4. Lot's of ideas shared already. What works well for me:

    👉 Monthly targets on First Time Buyers.
    👉 Pricing strategy on new products, starting with special try out/pilot rates, gradually increasing rates with every new "wave" of customers.
    👉 Value based pricing rather than cost base pricing.

    𝗦𝗼𝗺𝗲 𝗶𝗻𝘁𝗲𝗿𝗲𝘀𝘁𝗶𝗻𝗴 𝗿𝗲𝘃𝗲𝗻𝘂𝗲 𝗴𝗲𝗻𝗲𝗿𝗮𝘁𝗼𝗿𝘀 𝗵𝗮𝘃𝗲 𝗯𝗲𝗲𝗻:
    👉 Combining webinar with checklist making it a paid product
    👉 Turning free events in to paid events
    👉 Turning free challenges in to paid challenges
    👉 Co-productions with knowledge experts

    In the past I have been inspired by Charlotte van 't Wout who sells (Insta) courses via Insta.
    👉 We started selling Linkedin courses via LinkedIn in private Groups. This actually became one of our biggest revenue and margin drivers.

      1. Depends on the offering. We have sold a checklist for 25 euro and later combined a webinar with the same checklist, charged around 47 euro and sold it.

    1. Co-productions: I am working on that as we speak. I do not know what will happen
      The LinkedIn Private groups: I never go into them. But it seems to work? That is great.

      1. Hi Melanie nice to see you here! Groups on LinkedIn sucks! Especially because you don't get notifications (and you shouldnt want that because some are too large). However in our case it's a managed Group where we offer course material. So people will proactively visit them and engage on particular content.

  5. First I thought there is not much in it for me. I am just starting, and I am more busy with getting attention than having profit. I tend to give away a lot. However inspired by your list Nisandeh, I can give you my attention points.
    1. Ask a higher price for my lessons in math, more in relation to my education (Dr. in Mathematics) and to what I can offer. Thus far I am asking too less, and that results in being not taken seriously.
    2. Be more strict in sending and follow up of facturing.
    3. Think about upsells and cross-marketing in my shop of mathematical modules
    4. Propagate my new website when the webshop is sufficiently filled

    Thanks and till next time.
    Tineke

  6. Yesterday I had a (paid) speaking engagement in a library, I brought my books and I sold extra. I still need to think about anything for another upsell. However, I use different links in my book, some to a downloadable checklist for example, but you come on my list through others.

    So from now on, I want to organise more events myself, but also ask libraries to speak about my book.

    1. Great to see you back with us again Naomi and so much valuable input it's wonderful to read.

      I LOVE you idea of putting links in your book for downloadable checklists, people LOVE it and it helps grow your mailing list...

  7. All great ideas. Most of mine are not origanal.
    Reduce costs.
    Raise prices.
    I created a course: make once, sell often. Can do more of this.
    I need to work on my mindset regarding this topic.

    1. Well @Dunja... If we would share our original idea's, I don't think there would be many of us left here 🙂

      So thanks for taking the effort and sharing your thoughts with us! And please do tell us more about your Course!

      1. I created a course: de 9 leerstijlen: ont-dek en ont-wikkel het talent van je kind (the 9 learning styles: discover and develop the talent of your child). Everyone has the 9 learning styles, but 1 or 2 are best developed. Find out what no. 1 and 2 of your child are and you can support and motivate your child with a.o. school subjects.

          1. I sell it on my website. And promote it organically on Facebook. Now I think of it, LinkedIn should be on the list as well to promote it. I plan to make a small promotion film for Facebook.

  8. Damn, I forgot to hit the 'post comment' button this morning. Everything gone, but I'll try to reproduce a short version of my input.

    So, I agree with Bina! This one is quite a challenge. And I don't mean brainstorming on this topic (which is already tough) but implementing it in my business. You know, I just can't cut material costs or investments in product development. Moving my production to China is not really an option, because I think it's insane to move around big chunks of stone around the world for gravestones that last max 30 years. And I don't know how the people there, who do my production, are treated by their bosses. I have some nice and creative ideas, but I really could use a sparring partner who has specialized expertise.

    QUESTION: Does anyone know a successful entrepreneur who develops, produces and sells physical products? I'll ask this again in the morning, when it fits the brainstorm-topic-of-the-day.

    My brainstorm input:
    1. Split up your products in smaller products and increase the price of each. Most clients want the whole package, so in the end your profit will be higher.
    2. Start a webshop on Instagram. It makes it easy for followers/visitors to buy something from you and of course impulse buyers are welcome too.

    That's it for today. See you in the morning.

    1. I really Love how you are participating and asking for help! Woow! Well done, my friend.

      And yes, I do have a close friend (my wife) who fits in your criteria 🙂

      And I think you need to first work on your mindset as I see some great huge Mind-PIEPS 🙂

      So Workshop on Insta? How does that Work? I test it some months ago but didn't really got the hang of it.. Could you please explain how YOU do it?

      ps: You are such an inspiration ! Please keep on posting!

      1. You're sharp, Aramik! Thanks for your valuable feedback 😃

        I would love to connect with your wife, and I'm curious what she does.. Could you let me know where I can check her out? 😄

        Yeah, my mindset needs some improvement, I know. But I'm working on it and making a lot progress! You, yes all of you, are a huge inspiration. And I'm not pleasing here...

        Insta webshop, not workshop. I'm working on it, it will go live in three weeks. I'll keep you posted!

        1. Ofcourse! That's what Friends are for, aren't we? 🙂

          And yes: Ofcourse: Just search for "Chantal Meester" on LinkedIn. She is posting every day, one of her posts and just check MixedMediafun.nl, there are her ArtCards.

          One warning, tough: 🙂 She is very very busy, so If you contact her, don't expect to get an answer within 14 days 🙂 hahah! (I do mean it :))

          Considering Your Mindset: Just remember what Zig Ziglar said: "Why we need to work on our mindset Every day? Well.. You do also shower every day, don't you? That why I recommend to work on your midset every day!" : )

          Oh ok! I thought you were already running your Insta-webshops, Totally cool! Keep me posted!

  9. 1. Get out of commodity
    2. Make a 10X product
    3. Raise my prices
    4. Make stack deals (take 8 and pay 6)
    5. Make tailored offers. It’s easier to ask higher prices, but more than that- give your customer the feeling that they’re special..
    6. Make something recurring as an online product. My brain is already spinning with all the possibilities... wonderful!

    1. @Gerdy - your #1 is a great one - get out of being a commodity - I see how powerful that one is, but I'll have to think harder how I can do it in my profession. That's my assignment for today!

      However your #5 is a fantastic one for my teaching business, so thanks for that...

    2. @Gerdy : Love your idea's! Especially #5 ! I love to make all of my clients, feel special and appreciated.

      Well.. #6... Could you share your possibilities? 🙂

    3. I forgot to mention one:

      The stack deals, I use for my books.
      But...
      make audio of my book. Get this request more often... and then make it an upsell or combine it with the book.

  10. Reduce cost, improve cash flow, increase profit (margins)...it's kinda in the same corner.
    # Do the maths. Similar to Nisandehs' #8 and #9...grab your calculator and take EVERYTHING into consideration when calculating profit margins. Do not fool yourself with thoughts like "I have to do this or that anyway" so that you do not have to add it to the cost price. After this excercise you have the outcome of #8 & #9, which products, services or customers to lose.
    # Look for products/services that only need your time once.
    # Franchise where possible (triggered by JV of Aramik)

  11. I totally agree with Bina: WOW, this is a challenging subject, I didn't see this one coming!

    First I'd like to ask you something: does anyone of you know a successful entrepreneur who is a maker? Someone who sells products but also develops them? I would love to learn from someone who is in the same field.

    You know, I shouldn't focus on the obstacles, but I simply can't cut my costs for materials and I do have to invest (a lot of) time and money in product development. Move production to China or India is no option for me, because it's my mission to reduce the carbon footprint of my products and I stand for local quality. I think it's insane to move big chunks of stone around the world for gravestones that last on the graves for max. 30 years. Besides I have no idea how the people producing it are treated by their bosses.

    Anyway, a challenge that needs some more brainstorming for me. But your input (from all of you) is really helpful! Thanks a lot.

    My input for today:
    1. Split up big products/programs and and sell them separately for a higher price. Most of the people who buy it want the whole package, so you're good.
    2. If you're active on Instagram, start a webshop there. People buy from you more easily.

    1. When my father died last year we were considering “non-traditional” materials:
      1. Readily available, and very cheap to acquire (free if you get them yourself) - like big sea pebbles.
      2. Recycled material - there is amazing stuff you can do from melted glass, for example.
      3. Using concrete + epoxy resin - both come in bags, mix water and voilà… you can make anything…
      Just some food for thought, Ine

    2. @Ine - First, remember you only need 1 GOOD idea to increase your profit margins (obviously with more it would grow),

      I think your #1 is a great one! Especially if you add to it maybe a JV partner offer which then you can triple your price. So something like your main product + a program + an additional RELEVANT gift from a 3rd party.... This creates for you a totally different offer than you had before and can charge for it more.

      Like you said most people would like the FULL SERVICE in the end...

      1. Ah, yes, you're right Vered: 1 GOOD idea can make a big difference. Thank you for the reminder, that helps keeping focus!

    3. I was thinking about you yesterday. There’s an ocean clean up project that looks for people who’d like to make products from their waste. They first produced sun glasses and yesterday they asked for other ideas. Maybe it’s something you could explore?

      1. Hey Gerdy, sounds interesting! Where can I find information about this project? Thank you so much for thinking along 🙂

  12. The series is BRILLIANT Bina!

    I’m currently writing “the meeting bible”, and it’s soooo easy to turn that into a series- and it also makes the books more focused as I don’t have to put everything in one. Fantastic!

  13. yesss ! Now we are getting Focus into real stuff: From Cashflow now into Profits!

    Well, let's get into it then:

    1: Keep it Simple. You always should do the nest math: 90% Margins, 10% Costs.

    2: Have an amazing JV-Partnership Plan! The fastest and cheapest way to grow exponentially! And still... 90% of Small Business Owners doesn't do it.

    3: Get yourself (at least) 3 ways of "Organic Lead Generations". These are Lead generator which does NOT cost you any money like Fb-ads or Google Ads.

    4: Design a 4-step plan for your Client-on-boarding = meaning = Make sure your prospects first get 4 X a free product with an immediate Results and Instant-gratification so that you qualify your leads 4 times BEFORE they buy anything from you. Well.. If you really overdeliver and made them really really happy (4 time in a row)... Then the 5th step would be just let them take their Credit card and buy your product without questioning it.

    (For example: I have 4 product before any body gets my personal time. First they download my Ebook, then they get a free Webinar about the same topic, then they participate in a Challenge, then they come into a Q&A training... and then: They make a choice what to buy!)

    5: One of my bigeest secrets and High Value-Profit boosters: Add into EVERY free product opt-in page, a page called "Trip-wire", "upsel" page! Meaning: Remember they first downloaded my Ebook? Well: They Opt-in and I thank them and give them a huge discount on my Upsell-page (from 197 to 17 euro). First time 40% buys.

    Well, If they register for the webinar (next step) for free, again: I offer them another Upsell for 17 euro. Now 60% buys...

    And yes: When they register for the challenge... Well.. You know what I then do 🙂

    Well: I got them registered for free for 4 times, I did increase the amount of transaction with a huge %, every time. and I am still friends with them as I am still keep on overdelivering.

    6: Add a "Kassa Koopje" at the end of Your free or online product process. This is also a HUGE convertor.
    What it means?

    I give my email-adress for a Gift, I put names of 4 friends and go to next page.

    On this page: I need to fill a huge form of subscription (great way to analyse and qualify btw!) andddd at the end of this form, you just give me a"kassa koopje" just BEFORE I push the Enter button. Ofcourse you need to have a relevant and Irristanbale offer of not more than 17 euro's.

    Well this means: I register for a gift, I put all my gegevens in AND I get a one-time-offer at the same page which I gladly will buy from you as it is your birthday and I just got a gift and want to return the favour (Reciprocity). This has been a huge game changer.

    7: Change Your Funnel model into a Diamond model with Your Community in the centre of All of Your effort. This will increase and focus all of your effort AND will get you a huge Margin Boost (because then you just communicate your free product, deals, launches to 1 place).

    1. WOW. Aramik. THANK YOU. Such valuable these tips! Thank you for opening up on your business model.

      I have an online business that is running without me where I put those things in practice but not yet with my new business. In fact I don’t even have a website yet 🤪 first sell ey.

      I’m gonna think about different types of free gifts. My task of today.

      Do you generate your leads without ads?

    2. Only 10 % costs... interesting... I will try to do that more (now it's up to 20%)

      About the organic leads, when I started doing webinars, I grew my list with 0 costs from 0 - 534 subscribers in 3 months.

      1. yess @Naomi! 20% is already a one of its kind in de NL... I know so many experts doing millions turnover but having 10% Profits... 90% costs...

        So are you still doing your webinars?

    3. Hi Aramik,

      Thank you for this fantastic comment with a lot of value.
      What I like in your comments, especially this one is the word PLAN
      I have a JV, you have a PLAN.
      I have a funnel, you have a 4 step plan.

      My top of mind is to make a fantastic 4x give away that people really want to download.

  14. OUCH... this one hurts... I mean the Loch Ness reference - may I steal it from you Nisandeh?
    I believe that even more than small business owners, writers and authors suffer from the same myth - very few of us belong to the club of JK Rowling or Stephen King, most of us supplement our income with day jobs that hardly cover our meager expenses.

    The first step in increasing our profits is... knowing the difference between Income and Profit!
    Here are some of my tips that I've learned in my life:

    1. READ THE DAMN CONTRACT - Not all book deals are the same. even if you're not good in "lawyers" language make sure you have someone on your corner that knows and can check how much you're going to get and WHEN!!!

    2. CONSIDER SELF-PUBLISHING - your margins of royalties are much higher than with traditional publishers and therefore you have more control over it. It used to be a "nightmare" but now with Kindle life is easier and the possibilities are huge

    3. BECOME A SERIAL WRITER - when you write series you can always bundle them together and have higher profits than 1 book at a time.

    4. CROSS MEDIA - turn your book into a screenplay or a play, or turn your screenplay into a book - it immediately has a higher-perceived value when you're able to say that it is based on... you can sell it for a higher price for the same effort, which means much more profitable.

    1. Serial writer! I love your book idea. I am working on a project right now for toolkits. But actually I wanted to write a series in a local newspaper to let people get to know you...

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