Plump Up Your Profit: 5 Simple Steps to a Bigger Bank Account
If you’re like thousands of entrepreneurs in today’s business world, you’re holding your own with your business. You’re winning over customers and clients, working hard and making headway. Your company is taking off – like an oversold flight to Vegas!
However, there’s one issue rearing its ugly head…it seems that most of the money you make goes to someone other than you.
After the bills are paid, the stock is replenished and the employees have their paychecks in hand, how much is left? When you’re looking at your bank account, what do you see? Are you making the money you want to make?
Protecting your profits is often a learned behavior. It doesn’t come naturally to everyone. If you’re one of the lucky few that’s genetically programmed to cut corners, save compulsively and budget effectively, you’re miles ahead of the rest of us.
Generally speaking, (and this is a broad generalization not meant to offend anyone) overdoing it is the American way of life. As a society, we consume, we spend, we splurge. This is totally awesome when we’re the ones doing the selling!
But when it comes to pocketing the profits of our labors, our spending habits can turn around and bite us in the bottom (line, that is). I’m going to share some secrets with you that will help you keep more of your money, which is not only good for you, but good for the people that depend on you.
First, let’s look at profit, and what it really means.
Profit = revenue minus expenses.
So to make more profit, you must increase your revenue or decrease your expenses. Simple, right?
Here’s a quick example:
$1,000 Revenue - $200 Expenses = $800 Profit
$1,200 Revenue - $200 Expenses = $1,000 Profit (Increased Revenue)
$1,000 Revenue - $100 Expenses = $900 Profit (Decreased Expenses)
$1,200 Revenue - $100 Expenses = $1,100 Profit (Increased Profit AND Decreased Expenses = Maximum Profit)
Now we’ll cover the steps you need to take to build up your bank account. Trust me, they work. And most of them will pay off really quickly, so you’ll want to keep doing them. It’s like a diet that actually works and isn’t hard to follow. (Can you find me one of those? If so, THAT’S how you’ll make your money…)
Decrease Expenses - Cut Monthly Bills
We all buy services or subscriptions to things we don’t need. Those little $5-$30 a month charges really add up, especially when you don’t use them often – or at all. (Do you know how many people belong to Netflix and haven’t rented a movie in a year?) They can cost more than you think. Do you have software you don't use or multiple fee-based email accounts? How about satellite radio or unread magazines? Ditch it.
Decrease Expenses - Eliminate Credit Card Interest
Pay the full balance on your business credit card each month if you can. If not, hunt down a card with a lower rate that gives you perks like cash rewards or travel points.
Decrease Expenses - Recurring Technology Costs
Call your vendors and ask for a lower fee. There is enough competition in the marketplace that if they won’t help you save money, someone else will.
Increase Revenue - Raise Your Prices
A little jump of 10-20% can make a big difference. If you haven’t raised your prices in ten years and inflation is 3% a year, you’re already way behind. Give yourself a raise. Analyze the market carefully and calculate your value. Have your prices accurately reflect this value.
Increase Revenue - Create Something Special
Survey your current and past customers to see what they want or need that you can supply. This is especially effective if none of your competitors are offering anything like it. Being in demand is a surefire way to plump up your profits!
Does this sound almost too easy? It is, once you try it. And as I said before, the results can be almost instantaneous! Take this strategy and run with it (if you can with all that extra profit in your purse 😉 )!
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