How to drive your bottom line up

It’s easy to overlook the bottom line in the interest of long term growth. While this is relevant, without substantial cash reserves built from higher margins, growth will be impeded. In this post, we share a few tips you can consider to improve your business’ bottom line.

1. Review your pricing strategy

Small businesses inherently fear to raise their prices as it may turn customers away. There is some truth to this. By and large, however, most customers are reasonable enough to know to raise prices is necessary to keep the business sustainable. They wouldn’t want their favourite grocery store or social medial agency to go belly up. Having said that, this isn’t an excuse to wantonly raise prices. Small rises can produce the desired impact on your bottom line.

2. Shed excess overheads

‘Corporate’ obesity inflicts small businesses too. There is a tendency for businesses to accumulate ‘fats’ as they strive towards growth. These overheads may appear necessary to achieve long-term goals. In reality, they are nice-to-haves than must-haves. It is not until a situation calls for their culling will this be evident. By then, it may too late. Start shedding now!

3. Streamline your offering

You might have a wide range of product or service offerings. It is pretty common in the small businesses category. Usually, it is an attempt to serve a wide portfolio of consumers. Unfortunately, in that wide range of offerings, you might find a dud! They cost you to keep them in the business. Weed them out by applying the 80:20 principle – 80% of your revenue may come from just 20% of your total product or service offerings.

4. Drive conversion rates up

Thanks to available marketing technology, there are many ways to drive conversion rates up. A well-thought-through and executed marketing campaign helps. But do not rush into it without a clear understanding of the problem your consumers want to be solved. Craft your strategy first.

A healthy bottom line contributes directly to positive cash flow. Work towards it as you take your business to greater heights. Connect with us to learn more about the steps above. Call Sydney Accounting today on 02 9810 3222