2 tweaks to increase profits in any small business

In this post I hope to explain 2 small things you can take action on straight away that will help you increase you profit margin and grow your business.

By adding the results of these 3 minor changes over the next few weeks you will certainly see an improvement in your bottom line.

So lets get started……..

For this example we are going to use a small hairdressing Salon as the sample business and make some assumptions, average number of visitors to the store, average number of customers & average sale value per customer.

So for this example based on a 5 1 /2 Day week

Number of current clients per week  = 40

Average sale value = $55.00

Weekly income = $2200.00 of which $1000.00 is profit after expenses = approximately profit margin 45%

Lets say we look at attracting just 2 new clients a week, that will generate an additional $110 in sales, the majority of oversheads and expenses are already covered but we will round it off to $100 and what will if we increase the prices by 5% ($2.50, will anyone notice) or encourage the client to purchase additional services.

Here are the results,

40 existing clients increased by 5% = 42 (2 extra clients)

Average sale $55,00 x 5% =57.50 (price increase of just $2.50)

Total weekly sales = $2415

Additional income = $215

That’s a 21.5% increase in profit margin

Would that help your business?

Regards

Fred

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