Five Ways Small Business Owners Can Increase Their Bottom Line

The following guest post was submitted by Caitlin Laura, with Experian QAS. Caitlin is a small business owner who continues to look for ways to save money and be more efficient. 

In a time of a recession, for small businesses to increase their bottom line they need to focus on calculating actual costs of running a business. Boosting profits is important but so is cutting costs. If a company can cut out a few hundred dollars a month, this adds up to a few thousand dollars a year, which is huge for many small businesses.  It’s a downfall for many companies to strictly focus on profitability because they can also save money to increase their bottom line. Let’s look at 5 things businesses might overlook when trying to improve their bottom line:

Verify Client Information

Businesses waste thousands of dollars a year on returned mail every year. If your business does a lot of marketing though direct mail then address verification software can save you money in addition to increase your response rates.  Address software can save you time and money in the long run and it’s a cost companies can calculate its worth fairly easily. E-mail verification can also be a valuable tool to increase your reach if your company does a lot of e-mail marketing.

Negotiate Long- Term B2B Contracts

If you are stuck in a long- term contracts for phone, DSL internet, e-mail or any other services, negotiating contracts to reduce costs is a must. As a small- business, bundling packages together might save you a lot of money. There might also be phone lines or other services that you can cancel all together. Shop around and do your homework to find out the best rates. If you can find a better deal, present that to your current service provider. They would rather keep your business even if they have to negotiate your contract than lose you all together.

Cross Sell Products

No matter what type of business you are in, there are probably services that you provide that compliment what you already do. For example a small marketing company can expand their services by doing search engine optimization (SEO) and pay per click advertising (PPC). A small babysitting company could offer things like tutoring or soccer training. A massage spa can also sell yoga clothes, health foods or offer manicures and pedicures. By cross selling products, your existing client base will spend more money.

Cross- Channel Your Marketing Efforts

Social media, print advertising, mobile marketing, SEO and public relations should all come together on a unified front. Materials you create such as a press release can also work for SEO, by optimizing your content. The copy you create for a print advertisement can also be placed online. By using the content you have created for multiple purposes will help save your small business time and money in addition to helping brand your product or service across all of your channels.

Invest in your Employees

An employee that shows up and accepts a paycheck is worthless for a small business. All employees should be invested in your company’s future and you can do that by investing in them first. Invest in your employees by doing things like doing cross training and show them how they fit towards making the company better as a whole. Get to know your employees on a personal level and give them flexibility like working from home if they need to. Reward them for their hard work in other ways besides monetary compensation.

Many small businesses also flop because they think just because they are busy they are profitable. That is not always the case and management needs to do monthly (not just once at the end of the year) assessments of their actual costs. Small businesses should constantly be on the lookout for ways to cut their costs and increase their profitability if they want to succeed.

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image credit: 401(K) 2012