6 Fast Ways To Improve Your Profits
 By Stephen A. Lanvil

Profit is the thing that keeps a business in business. And all businesses—especially startups—can aim to increase their profits.

Of course one of the quickest ways to increase profits is to raise prices. But in this economy, at this time of year, that may not be the smartest move.

So instead, try these six ideas.

1. Decrease your expenses
Next to increasing prices, decreasing expenses is one of the fastest ways to improve your profits.

But, don’t start slashing costs indiscriminately. You want to start by eliminating superfluous expenses. You don’t want to start by cutting costs that might impact your marketing, operations or personnel.

So, take small steps first. Try these:

• For long distance calls, use allotted minutes on your cell phone instead of paying long-distance rates on a landline.
• For client lunches, opt for casual dining rather than a pricey restaurant.
• Don’t make impulse purchases; instead take time to look for discounts. For example, as an AFS Member you can enjoy discounts on everything from auto rentals to printing.
• Eliminate subscriptions to publications that you can read online for free.

2. Focus on profitable goods
Which products and services generate the most profit for your business?

The answer may surprise you. But, once you can answer that question, throw your energy into promoting and selling those items. And watch your profits soar.

3. Sell more to profitable customers
Some customers are more profitable than others. They may be easier to deal with and require less of your time. They might purchase more often than other customers. Or they may make bigger purchases.

Once you know who those profitable customers are, treat them like royalty.

Give them exactly what they want, when they want it. Find similar products and services that appeal to them.

4. Develop smart tax strategies
You must pay your fair share of taxes. But, there’s no need to pay more than you owe. Savvy business owners learn how to take advantage of legitimate deductions to reduce their tax bill. And reducing taxes increases profits.

Need help? Take the time to find a tax professional who understands your startup and knows the tax laws.

Have questions? Turn to the certified public accountants at AFS ProTax. Through the AFS website, ProTax offers complete and confidential answers to your questions within two business days. And ProTax is available at no additional charge.

5. Ramp up productivity
If you work more efficiently, you’ll most likely be more profitable. That means:

• Manage your time wisely
• Use technology to automate tasks
• And make sure employees are working at peak performance

6. Collect money on time
It doesn’t matter how much you sell if you can’t collect payments from customers.

Billing on time goes a long way toward getting paid on time. And collecting payments on time keeps your business in the black. Try these tips:

• Send out invoices promptly
• Include payment due dates and terms on your invoices
• Track invoices and take action as soon as a payment is late

With QuickBooks® financial software, AFS Members can get help with each step in the billing process. QuickBooks gives you a fast, easy and integrated solution for accounting software. As an AFS Member, you can save 20 percent on QuickBooks and get free shipping.


(Posted October 2010)

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