How to Instantly Increase Your Business Profits Today
There are really only two ways to increase profits in your business.
One way is to increase sales (assuming you can already generate a sale at a profit).
The other way is to reduce your expenses.
For some reason, the subject of increasing sales seems to hog all the attention.
Cost cutting? It’s the ugly duckling that nobody wants to talk about.
But here’s the advantage of cutting costs…
It’s faster, easier, and has an immediate measurable return.
To grow an extra dollar of profit in your business, you may have to sell $2 or $3 or even $5 worth of goods and services.
But you can create that same dollar of profit instantly if you eliminate $1 of business expense.
Naturally, you can go overboard cutting costs. This is often what corporate raiders do. They come into a struggling business, slash costs, then say, “Look what we’ve done for profits!”
The corporate raiders often sell the company and move on to the next deal. But many of these “slash and burn” jobs lead to the company’s demise within a year or two.
Cut too much and you’ll destroy your business.
Still, there is usually plenty of fat to cut in just about every business… especially businesses run by solo entrepreneurs.
That’s because one person can only do so much. We’re often so focused on bringing in new business and doing our work that we forget about ongoing expenses we’ve signed up for.
A Quick 3 Step Process to Cutting Costs
I strongly recommend doing three things to cut your business costs:
- Keep a record of ongoing expenses in your business. See how much it all totals up to. You’ll probably be surprised by how much you spend each month.
2. Next, look at the “low hanging fruit” — what things can you cancel right away with no impact on your business?
3. Then look at the big expenses. How can you reduce or eliminate these expenses?
It’s the old 80/20 principle. You’ll find about 20% of your business expenses represent 80% of the total amount you’re spending. The other 80% of expenses will represent only 20% of your total monthly spending.
So focus on eliminating the expenses that will free up the greatest amount of cash flow… with the least impact on your ability to run your business.
After all, this is the original job of the entrepreneur: to shift resources from areas of low return to areas of high return.
If you’re not actively doing that, you’re not fulfilling your role as an entrepreneur.
-Ryan M. Healy
P.S. Speaking of returns, your investment in an ad, sales letter, or email sequence can have an immediate measurable impact on your business, sometimes in as little as a few weeks. See how I can help here: