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Finding More Profits is No Small Matter

Joyce Morse

November 02, 2015

Many small business owners and managers feel they have maximized the return on investment for their product or service.

Unless they put more money into the business and expand or add new products and services, they have reached the ceiling on their revenue. What many fail to realize is that hidden profits exist in almost any small business.

Utilize your hidden profits to help your small business grow; replace a piece of equipment or provide a cushion for slow periods.

While at first glance, they may not seem like much, you'd be surprised at how much they can add up and help your company improve its bottom line.

The key is finding those profits that are well hidden within your organization.

Start with Your Budget

Look at your current budget, specifically your costs.

If you can find ways to reduce those expenses you have control over, you can see the profits increase.

How long has it been since you've had vendors bid for their services? You never know when a new guy in town just might offer the best price or make the competition offer a better rate.

Maybe you have insurance to repair a piece of equipment within 24 hours.

Many companies will give you a guarantee if you pay a fee, but do you really need it that fast? Could you survive for an extra day or even longer so you don't have to pay extra for maintenance?

Make Accurate Predictions

When determining where your business is going, you need to be able to analyze based on present data.

You can plan your budget better if you know what to expect.

Look back to look ahead. Review past records on costs and income to decide how to budget for next year.

Don't forget to figure in seasonal changes.

As the article, “5 Forecasting Tips to Help Managers Find Hidden Profits”, says, consider both expenses and revenue fluctuations based on season.

For example, a property manager may have to pay for higher utilities during the winter or summer while turnover may also be higher at this or another time.

Those fluctuations can trip you up if you don't add them in ahead of time.

Readjust Your Pricing

You may think you're at the top when it comes to what you can charge for a product or service, but you may be able to find a unique strategy to bring in more.

For example, a landscaping business can raise its prices on lawn treatment contracts by adding in a fifth application when they have previously charged for four.

Or perhaps they'll include a vitamin treatment for the lawn to help it thrive when raising the price.

The idea is that you are giving the customer more even though you are raising your prices. You just have to make sure your business is actually bringing in more money.

Finding hidden profits in your company isn't always easy, but they are there if you know where to look.

You'll improve your small business' profitability if you know how to capitalize on them.

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