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?