If you want to know how to improve profit in a small business, the key is to differentiate yourself from your competitors. Most small businesses are started by business owners who believe in their products or services. But that alone isn’t enough. Unless your brand can stand out from the competition, you won’t be able to acquire customers or grow revenue.
With increasing digitalisation and low barriers to entry, anyone can start a business now. This means, with every day, you’ll have more competition. Some could be from your neighbourhood and some could be from another part of the world. Being unique will show you how to improve profit in a small business.
All small businesses and startups should know how to manage their expenses. A unique product or service experience will help you cut down your costs (link to “10 smart ways you can keep costs low as a startup business”). Here are six ways to achieve that differentiation.
You’ve got to be precise when you define your market. You should have your ideal customer in mind, with all their demographics (gender, age group, location etc.) online habits and the challenges they face.
If you have a salon, your market can’t simply be “everybody.” What’s their age group? Are you looking at married or unmarried people? Working or non-working? How much do they usually spend on salon services in a month? What apps, websites or social media pages do they frequently use? You need to know all that.
If you’re convinced about the quality of your product or service, the next step is to define your brand. Your brand is the response your name evokes in a customer’s mind. It’s a combination of your logo, visual identity, unique characteristics and the tone and manner of your engagement. This is what will help with your positioning.
Are you a friendly car maintenance service or an expert at it? Are you a traditional music teacher or an experimental musician? Once you define your brand identity, you should ensure that all your touchpoints, from your website to your customer interactions, reflect that.
What’s the number one difference between a big business and a small business? A local, independent business has a face to it. This humanises the brand and makes it approachable. If you want to know how to improve profit in a small business, you should put yourself out there.
It would be highly effective if you can add your name to your business. You should also directly address customers through your social media pages and interact as an individual on online review forums.
Treat every customer as if they are your only customer. When you improve your customer experience, it won’t matter even if the product or service doesn’t turn out to be exemplary. A satisfied customer will look beyond minor flaws because what we remember are not events but how we felt during those moments.
Every member of your team should be told to be courteous and friendly. In every customer interaction, the question you should be asking is, “What can I do now that will make them write a glowing review of our business or recommend us to their friends or family?”
Social media has enabled small business owners to interact directly with their customers. Not every post has to be about your product or service. Some should be about your expertise in what you do.
If you’re a fitness trainer, talk about the need for seasonal exercises that people can do at home. If you offer foreign language services, share some of the best movies that your followers can watch online.
How are your competitors positioning themselves? How do they interact with their followers on social media? What products or services have they launched recently? What are their bestsellers? What offers do they have?
For this to be effective, it has to be a regular exercise. Remember that you don’t have to mimic your competition; you can also choose to be dramatically different.
Once you consistently work on these tactics, you’ll improve your customer acquisition and retention. With increased revenue, you’ll quickly learn how to improve profit in a small business.
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