Running a small business is challenging and quite often it can feel like you are working incredibly hard for very little reward.  

Not making enough profits? That’s when it becomes very easy to get lost in implementing an array of tactics to try and improve results. Quite often the first response is “I need to advertise more to get more clients” or “I need to cut costs to save money”. One or both of those may be part of the answer to your problem, but a strategic look at which of the 7 growth levers will give you the biggest impact on your results is a better place to start than with a knee jerk reaction.  

Work with your accountant and use your numbers to help you see which lever to focus on first. The magic will start to happen when you focus on the right two or three levers for your given situation. 

Here are seven growth levers that can help you boost your business’s profitability.

Keep More Clients

It is easy to retain the clients you have rather than acquire new ones. Loyal customers not only provide repeat business but also refer others to your services. So, if the reason behind reducing profitability is a loss of current clients, you need to start here and implement strategies for retention. 

• Exceptional Customer Service: Ensure that every interaction is positive. Train your staff to be attentive and responsive. 
• Regular Follow-Ups: Keep in touch with your clients through newsletters, emails, or phone calls. Show them you value their business. 
• Loyalty Programs: Reward repeat customers with discounts, special offers, or exclusive access to new products. 

Get More Leads

If your business model is such that you sell to a high volume of customers at a low value or your client base is too small or you are new to business, then your first focus might be on obtaining more leads.  

 A steady flow of new leads is essential for growth. More leads mean more potential customers and opportunities for sales. A good marketing strategy is vital and should include elements such as:- 

• Content Marketing: Create valuable content that attracts potential customers to your website. 
• Social Media: Use social media platforms to reach a broader audience and engage with potential leads. 
• SEO and PPC: Invest in search engine optimization (SEO) and pay-per-click (PPC) advertising to increase your online visibility. 
• Networking, personal branding, blog writing, guest appearances on other podcasts, becoming a leading voice in your industry. 

Convert More Leads

Getting new leads is one thing, converting them into paying customers is crucial for growth. The higher your conversion rate, the more revenue you’ll generate from your marketing efforts. This is where a strong sales strategy and process helps: – 

• Effective Sales Funnel: Design a sales funnel that nurtures leads through the buying process. Provide value at each stage of the journey. 
• Strong Call to Action: Make sure your website and marketing materials have clear, compelling calls to action. 
• Follow-Up: Don’t let leads go cold. Follow up promptly with inquiries and provide additional information to help them decide. 

Increase Frequency of Sales

The more often customers buy from you, the higher your revenue will be. Encouraging repeat purchases can significantly boost your profits. The nurturing of your clients does not stop once they have signed up with you. Create upsell campaigns and a value ladder of products that allows them to see other services that they can benefit from. Here are some ideas. 

• Subscription Services: Offer subscription-based services or products to ensure regular sales. 
• Reminder Emails: Send reminders to customers about products they might need to reorder or new services that would greatly impact their business. 
• Special Promotions: Run limited time offers or flash sales to encourage quick repeat purchases or to introduce new service offerings. 

Increase Transaction Value

Knowing the average transaction value, you are targeting per sale and customer allows you to understand the number of sales required in a period. If your current average transaction value is lower than your target, you need to raise the value to earn more revenue from each existing sale. This can be achieved without increasing your customer base. 

• Upselling: Offer higher-end products or services that complement what the customer is already buying. 
• Cross-Selling: Suggest related products or services at the point of sale. 
• Bundles and Packages: Create value packs that combine several products or services at a discounted rate. 

Improve Efficiencies

Improving efficiencies can reduce costs and increase your profit margins. Streamlined operations mean less waste and more productivity. At the start this may not equate to a cost saving, as investment might be needed to achieve the improved efficiencies. The important thing is to understand the return on that investment and over what period of time you could expect to make your money back. 

• Automate Processes: Use software to automate routine tasks such as invoicing, payroll, and inventory management. 
• Standardize Procedures: Develop standard operating procedures (SOPs) to ensure consistency and reduce errors. 
• Employee Training: Invest in training your employees to improve their skills and productivity. 

Reduce Costs

Lowering your costs can directly impact your bottom line. By reducing expenses, you can increase your profit margins. However, don’t reduce costs at the expense of being able to deliver your product or service and the customer service experience your customers expect or you might find retaining and attracting clients more difficult. That’s why we never assume that cutting costs is the first thing to do when looking to increase profits. 

• Negotiate with Suppliers: Regularly review your supplier agreements and negotiate better terms. 
• Cut Unnecessary Expenses: Identify and eliminate non-essential costs. 
• Energy Efficiency: Implement energy-saving measures to reduce utility bills. 

Increasing your small business’s profitability doesn’t have to be overwhelming. Start by working with your accountant to truly understand your numbers and what’s driving your business results. Analyse the reasons for the lack of profit and then implement one or two of these key profit driving strategies, and you’ll be on your way to a more profitable and sustainable business.