One of the most common questions I get asked by business owners is how they can improve their profits. This is understandable as profit is the one reason anyone is in business. My answer is simple. Increasing profit can only be achieved by working on and improving the variables that contribute toward the profitability of your business.

It’s wise to view your business in terms of five separate and distinct areas. You need to break your business down into a simple schematic. It doesn’t matter what size your business is or what the business does the same schematic still applies. We call it the Business Chassis. When you truly understand how a business works, you’ll realise that profit is the result of many variables and it can’t be directly altered in isolation

Conventional businesses looks at sales from the standpoint of three variables namely sales, expenses and profits defined by the formula: Sales – Expenses = Profits.
In this narrow approach, each variable depends on the other – forcing businesses to look at either increasing sales or decreasing expenses in order to influence margin and ultimatley the profitability of the business.

There are only five ways to truly grow your business: Increasing the number of leads, increasing conversion rates, increasing average transaction size per customer, increasing the number of transactions per customer and increasing profit margins. If you increase all of those factors by just 10 percent, you can give your bottom-line a massive boost.

I want to share five simple, proven (and low-cost) strategies you can use immediately to start feeding more profit to your bottom line. Most of them involve resources you probably already have in your business or little “tweaks” to strategies you may already be using.

Strategy 1

Increase your margins by taking a price increase on your bestselling product or product range. If you don’t know what your strongest product is, now is the time to find out.

Strategy 2

To increase your average rand value sale, create a guarantee especially if none of your competitors have one. Guarantees are great ways to covert customers and establish long-term customer relationships. This is especially true in categories where guarantees are hard to “guarantee” or in industries that don’t offer any. Communicate the guarantee to your target market. This will boost the number of referrals among current clients and increase the number of qualified leads.

Strategy 3

To increase your average number of transactions, create loyalty and referral programs. While a lot of companies use this strategy, many don’t use it correctly. To get the most out of a reward program, it should be targeted at your highest-yield customers, those truly loyal customers or clients who don’t haggle on price. This involves segmenting your client base. Done right, you can create both a rewards program and a referral program that is profitable versus one that simply defaults to discounts or giveaways.

Strategy 4

To increase your conversion rate, create sales scripts for your salespeople and train them. Sales scripts help to frame your sales process. The sales script should uniformly help initiate and build rapport which leads to higher sales.

Strategy 5

To increase your number of leads, test and measure low-cost ways first. Then move to paid advertising. Lead generation is actually the most costly of the profit-boosting strategies. So start with low-cost ways you can track for results before you start spending thousands on an advertising campaign.

Remember, you are looking for incremental increases to your bottom line. A 10 percent increase in each of these areas will make a significant impact on your profits as long as you keep your costs in check.

Profit-building strategies serve a number of very important purposes in business. First, they focus your mind and attention on what needs to be done to maximise your profits. Secondly, by throwing the spotlight on these areas you could learn things about your business you never knew before.


Novice entrepreneurs quickly learn the depth of truth behind the old saying: “It takes money to make money”. Beyond profit, cash flow is king in business. Launching a business can be next to impossible without cash to work with. It is therefore vital for start-up businesses to establish cash flow as quickly as possible during their first year of operation.

Since stiff lending standards continue to cripple many start-ups what can a new business owners do beyond trying to borrow from family and friends and maxing out your credit cards. Here are some funding and cash flow ideas to help you get started. These practical tips will help you to generate cash flow while generating a customer list that will serve as a foundation for repeat business for years to come.

  1. Primary service or product: One of the easiest ways to boost cash flow and profit is to drive your customers to your bestselling (or primary) product or service that has the highest profit margin.
  1. Deposits or pre-paid contracts: If you are in a service business, deposits are a great way to generate cash flow upfront. However, you need to deliver on the back end, or else you won’t be in business for very long. If you have a product-based business, you could also do the same with pre-orders, with a percentage of the final sales price going to secure the order or a certain delivered-by date. The key here is to get creative, as there are endless possibilities in making this model work for you.
  1. Periodic “closed-door sales” for new customers or loyal customers: This is a great way to literally create a captive audience for your product or service. Set it up as a workshop, class or demonstration in an environment you can control and with a sales and pricing process you can direct. For this event, “sale” doesn’t need to mean “discount.” Offering an exclusive, limited-time purchasing period for new customers (and in the future for loyal customers) is an incentive for them to get the latest, greatest, best or most innovative products or those with the greatest value before everyone else.
  1. Shorter payment windows: Depending on your company, you could combine upfront payments with shorter terms, especially if you are in a service category. It’s best to position the shorter terms as an offer with something to act as an incentive for paying early like a small discount. A better option is a small gift or some other kind of added-value offer. You could also position this as both a thank you and an incentive to keep customers consistent with shortened terms.
  1. Loyalty programmes price: Establish a loyalty programme and add enough value so you can charge a nominal joining fee of around R25.00. While there may be some initial costs upfront for producing loyalty cards or customer tracking, the extra cash generated over time ends up going straight to the bottom line. Not only can you create a highly targeted list of better qualified customers, but this is a simple way to easily generate cash quickly just by asking for it.
  1. Don’t Discount: Rather offer additional incentives such as free home delivery to assist you in closing the sale. Focus the customer on the benefits and quality of your product, not the price. Don’t be afraid to lose the sale. That way you will attract only A and B grade customers and clients.

You can expand on these strategies and also look to increase your value adds at different buying, sales or customer contact points along the way. The key is to test and measure what works and what doesn’t because no strategy will work perfectly for you every time. If you market correctly and test and measure everything you do, keeping your winning strategies and killing your losing ones, you will eventually find your cash flow “sweet spot”. That will lead to larger profits, increased cash flow and a healthier, more successful business over time.