All businesses want to maximise profits and small businesses are no different. How to make a profit in a small business is a question that most entrepreneurs and founders routinely ask themselves. But much of the advice you find online is aimed at medium and large enterprises.
You don’t want action plans that are expensive and too complex to implement. As a startup, you certainly want to know how to make a profit in a small business. But as part of your startup launch plan, you also want suggestions that are affordable and easy to implement.
That’s exactly what you’ll find in our list of affordable ways for small businesses to maximise profits. In fact, some of them won’t require you to spend any money.
Here are two things to remember in your entrepreneurial journey: just because you’re busy doesn’t mean that it will have any impact on your bottom line. Secondly, you don’t need to hire people just because every other business has them.
You can use accounting apps instead of hiring in-house accountants or doing it yourself. You can use chatbots to answer customer queries instead of having a customer support team. You can use specialised software to request customer reviews.
The question shouldn’t be what can be automated. It should be what cannot be automated and would require someone’s involvement.
You need to analyse whether your operations are efficient or needlessly complex. If a vendor has to go through someone else to get in touch with you, you can change that. If social media management is becoming complex, you can simplify it by using the right software.
As an entrepreneur, your focus should be on important projects and revenue-generating tasks.
Without marketing, no one will notice your product or service. That doesn’t mean you have to rely on the traditional methods that are prohibitively expensive. Focus on digital marketing and make use of the free opportunities while spending occasionally.
You should also understand how public relations work and make the most of any influencer marketing you may be able to get. Again, we’re not talking celebrities here. If you can get a VC, investor, analyst or journalist to mention you, that will be a good start.
While analysing startup costs, you should look at reducing your non-core expenses. Anything that doesn’t need your expertise and would distract you from your primary goals should be outsourced.
These include customer support, accounting, delivery, e-commerce management and even human resource services.
Instead of full-time employees, you can get interns at low costs. All you have to do is get in touch with colleges and other institutions in your area and offer short-term internships.
Considering the experience they will get at a young age, they would likely be eager to work with a startup.
The most effective way to limit your expenses is by having a budget. Every month, analyse your expenses and see what can be cut down, eliminated or outsourced.
You can look for vendors with better prices or bundled offers. If you have a full-time receptionist, you can consider a second-line app.
Even after the pandemic, don’t be in a rush to return to the old normal. If you have a digital product or service, do you really need a physical office? Imagine the rent, utility and maintenance expenses you would be saving with a wholly remote team.
If it sounds complicated, start small. Downsize your office space and give employees the flexibility to work from their homes twice a week. If it works well, you have all the incentives to make it a more permanent set-up.
Unless you concentrate on how to eventually make a profit in a small business, everything else is academic. With these functional and affordable suggestions, you should be able to cut down on your expenses and maximise your profits.
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