If you want your business to be making more of a profit, you have to begin generating more revenue. By definition, revenue generation is simply the process of selling more products or services to produce more income. In other words, to make more of a profit, you have to make more money overall. In addition to investing more into your company, there are a few simple ways to do this: raise your prices, gain new clients, or increase goals of what clients are paying for and how often they come back. Any one of these (or a combination) will improve how much revenue your company is generating. In addition, you will need to do this periodically in order to remain a contender against competing companies.
For many executives, the idea of raising prices is somewhat cringe worthy. Not only does it require calculating the rate of inflation and researching what prices competitors are offering, but it also causes discontent among customers, especially if they are already used to paying a certain price. It can be a difficult transition for everyone involved, but it’s necessary in order for your company and its reputation to retain value. For example, if you are a professional resume writer who charges customers $15.00 for each resume, but all of the other resume writers in your area are charging $25.00 per resume, you might find yourself with more customers, but you will be doing more work to make the same amount of money as the competition. This will most likely leave you feeling burnt-out and even taken advantage of. To avoid this, make sure you are keeping up with the rate of inflation and occasionally checking how much your competitors are charging for products or services similar to yours. Your price doesn’t have to be the exact same, but it should fall in the same ballpark.
Another way to increase revenue generation is to gain new clients. The easiest way to do this is by advertising and word-of-mouth. Think of your ideal client, and then focus on what people in their demographic spend their time doing. Be creative – is there a rival football game every year that gets everyone talking? Is there a preferred television channel or magazine that this group is especially interested in? Consider using these platforms to boost the amount of coverage you are getting on your own. In addition, don’t be afraid to spread the word in a more organic fashion. If you overhear a problem that you think you can assist with, speak up and offer your business card – most people will be happy for a suggestion in the right direction. Don’t be afraid to make your name and your company known. The more people that know about what you’re doing, the more clients you will gain.
Lastly, you can also focus on enhancing your goals regarding what clients are buying and how often they come back. For example, if you own a coffee shop and notice that every week, you sell 100 mochas and only 50 lattes, set a company-wide goal to sell as many lattes as mochas each day. If you realize that your best-paying customers are only coming in once or twice a week, consider setting up a punch card that rewards customers that visit four or more times per week with a free drink to incentivize them to come in more often. In essence, pay attention to what you are selling and how frequently repeat buyers are coming back, and then work toward implementing those results with other products. If you can get your best clients to purchase from you more often or in larger quantities, you will generate more revenue overall.
To conclude, “making more profit” is more complex than it sounds, but not quite as daunting as it may initially seem. In essence, it involves making sure your company is comparing well to its competition and that it is running at peak performance. To verify this, you can first ask yourself whether or not your current prices convey the value of your product or service. Are you attracting customers because they are interested in what you have to offer, or because you are the cheapest option? Secondly, what are you doing to attract new clients and generate interest? Keep in mind that the more people who know the name of your company and what you do, the more potential clients there will be. Lastly, make sure your company goals accurately reflect the growth that you desire. If you need to promote a less-popular product or incentivize current clients to purchase more frequently, your goals need to illustrate that. By asking yourself these questions and continually focusing on what you are truly trying to accomplish, you will not only optimize the efficiency of your company, but generate increasing revenue and see more of a profit as a result.