Small Business Tax Center
Small Business Ideas, Grants &
Plans to Start & Run a Business:

Small Business Grants
Network in Cyberschmooz Community Ask Questions Questions and Answers Share Tips Small Business Ideas List Your Business Business Advice from Idea Cafe Experts Coffee Talk with Experts Starting A Business Business Plan Biz Planning | Sample Plans Small Business Ideas Idea Name Your Biz Name Plan Your Biz Plan Financing $ Starting a Business Do It! Running your Business Marketing Tips Promotional Merchandise Marketing Tips Marketing | Sales | Customers Human Resources HR | Employees | Contractors Legal Forms & Tax Information Legal | Biz Forms Managing a Business Managing | Operations
Financing Resources Financing Your Business E Commerce & Webhosting eCommerce Take Out Info Trade Publications FREE Trade Publications Business Books Biz Books Your Own Business Small Business News Small Biz News Gen X Biz Gen X Biz Work at Home Work @ Home Business Information The Fridge - Biz Info on Ice Destress Send Awards Send Awards & Greetings Yoga At Your Desk Yoga @ Your Desk Fun Guide Guide to Find FUN Online About Idea Cafe Press Idea Cafe has received Idea Cafe in the News Idea Cafe's Kudos Kudos for Idea Cafe Advertise on Idea Cafe Advertise on Idea Cafe Privacy Policy Privacy Policy Contact Idea Cafe Contact Idea Cafe Link to Idea Cafe Link to/from Idea Cafe Join Idea Cafe
Search Idea Cafe Site Directory Site Map Online directory to business resources Biz Web Guide

Expert Answers to Biz Questions

Listen in! Pick up some expert advice to a reader's question that we selected from CyberSchmooz.

color business bar

What To Do to Improve Your Small Businesses’ Profits


Many small businesses, however, well they are run, struggle to maintain a stable cash flow and to find new ways of increasing their profits from time to time. However, to help your business to grow and to gain the capital that you need to reinvest into your business, finding a way to improve your small businesses’ profits is important.

  • Decrease Your Expenditure

Decreasing their expenditure is the first thing that most businesses do when thinking about the best ways to increase their profits due to the ease of which you are able to do this. There are multiple ways that you can decrease your expenditure, and these include options such as reviewing your supply chain to find the best deals for your business, ensuring that your stock reflects the demand, and making your processes more efficient to reduce the waste of energy and materials. However, for offices, you can decrease your expenditure easily by deciding to switch your energy supplier. Utility Bidder can help with this by allowing you to compare commercial electricity prices for your business to find the best package and deal for according to your usage.

  • Review Profit Margins

It is also important that you review the profit margins of your business to make sure that these are not hindering your performance. Although raising your prices can deter new customers, if you believe that you must raise the prices of your products to compete with the competition, you should offer incentives of free additional services alongside these raised prices. You can also increase your profit margins through upselling to your customers, as this encourages established customers to buy more of your products free from the concerns of finding new customers.

  • Prioritize Your Cash Flow

You can improve the cash flow of your business by sending invoices on time and ensuring that this money is returned to you in the time stated on the contract. If it is not, you should follow this up immediately. You can also maximize the cash flow to your business through methods such as allowing customers to pre-order products or creating pre-order incentives. This will, for instance, increase the number of sales that you will immediately receive on the opening day of a product or service’s launch. You can also increase cash flow by offering subscription services or payment plans to customers as this will enable you to have a steady and assured flow of cash every month.

  • Invest in Your Business

You need to invest in your business in order to get higher profits, and customers often look for businesses which are constantly growing, such as being renovated and updated to match modern sensibilities and technology. Not only this, but investing in your business by providing new products and services is also a great way to increase sales and customer numbers by broadening your expertise.

  • Consider the 80/20 Rule

In most businesses, 20% of your customer base brings in 80% of your revenue, and it is important to focus on these major clientele to bring in higher profits. Once you have determined the demographics of these customers, then you will be able to focus your incentives and targeted marketing on them rather than on customers who are likely to add only a small profit to your business.


Small Business Tax CenterIdea Cafe HomeSign UpBiz Grant CenterCyberSchmoozCoffee Talk with ExpertsPeople in Biz ProfilesStarting Your BizBiz PlanningRunning Your BizFREE Trade PublicationsMarketingFinancing Your BizHuman ResourcesLegal & Biz FormsManaging Your BizeCommerceYou and Your BizGen XWork@HomeThe FridgeDe-StressSend an AwardSend an eGreetingYoga @ Your DeskWeb GuideIdea Cafe in the NewsAbout Idea CafeAdvertise on Idea CafeContact UsPrivacy PolicySite MapSmall Biz News

Copyright 1995-2024, Idea Cafe Inc. Downloads are for personal use only, not for resale to others, and may not be reprinted in any form without written permission from Idea Cafe Inc.

DISCLAIMER: We hope whatever you find on this site is helpful, but be cautioned that it may not apply to your own situation, or be totally current at any given time. Idea Cafe Inc. and all of its current and past experts, sponsors, advertisers, agents, contractors and advisors disclaim all warranties with regard to anything found anywhere on this family of websites, quoted from, or sent from Idea Cafe. and its related sites, publications and companies. We also take no responsibility for comments published by others on these pages.

TRADEMARKS: The following are Registered Trademarks or Servicemarks of DevStart, Inc.: Idea Cafe®, Online Coffee Break®, The Small Business Gathering Place®, Take out Info®, Biz Bar & Grill®, Complaint-O-Meter®, A Fun Approach to Serious Business™, CyberSchmooz™, and BizCafe™.