General News
10 December, 2024
How to reduce bills and increase profitability as a brick-and-mortar business
Below is an action-packed list of straightforward and highly actionable things that you can do today to reduce bills and increase profitability in your brick-and-mortar business.
Below is an action-packed list of straightforward and highly actionable things that you can do today to reduce bills and increase profitability in your brick-and-mortar business. We dig into the detail to make sure you can clearly identify and action any opportunities for your business. So without further ado, here's the list.
1- Reduce EFTPOS fees
Depending on your business turnover, EFTPOS fees can range from hundreds, to thousands, to tens of thousands of dollars every year. A surcharge enabled EFTPOS machine is a way that you can reduce or even eliminate these EFTPOS fees. For example, EFTPOS provider Smartpay offers Smartpay Zero Cost™ EFTPOS allowing you to pay no merchant fees or terminal rental (available if you turnover more than $10,000 in card transactions per month). As surcharging becomes more accepted this could be a beneficial, quick way to increase profitability for your business, and eliminate this pesky bill.
2- Review utilities and recurring bills
You've probably heard this one a few times before. However, it pays to shop around when it comes to utilities. We recommend taking a quick 5-minute search now to see if you can snag a better deal on any of the below. Using comparison websites can be a quick way to spot a saving on your existing utilities, like:
Internet
Gas
Electricity
Phone
Insurance
3- Add upsells
If you've ever bought a pair of shoes and have been offered discounted socks or shoe deodorant, you've experienced an upsell. Upsells should be logical additions to whatever product or service you're selling. To get the ideas flowing, here are a few examples based on different industries:
Automotive - offering wheel alignments and balancing or a 100-point check instead of a 50-point check.
Retail - think complementary products. If someone is buying jeans, they might need a belt. Buying a summer dress, they might need sunnies and a hat.
Hair - upselling hair gels, shampoos and other grooming products. If there are products that you really stand by, it's likely your clients will want to use these too. Offering them for sale can be a win-win for both your business and your customers.
Beauty - as a beauty business owner you live and breathe beauty. This means that you're a knowledgeable voice in what products are good and work well. Consider upselling the products that you use and recommend. Additional services such as eyebrow threading can be great upsells too.
AdvertisementFood services - what are the items that people most request in your business? This could produce clues for a great upsell. For example, add guacamole for $2, add chocolate sauce, get it in a branded cup, etc.
Cafes - if you've ever ordered a coffee and your eye has caught that delicious-looking muffin or cookie, you've been upsold. Drinks, cakes and snacks are great upsell items.
Upsells increase your basket size or average order value. A higher basket size means more revenue and more profit for your business.
4- Review subscriptions
This might be one of the quickest ways to simply and quickly reduce your expenses. Just about everyone has at least one subscription that they don't really need but still chips away at their bank balance. Take a few minutes now to scroll through your transactions over the last ~3 months. For each recurring/subscription charge ask these questions:
Do I still need this service?
If I still need the service, do I need the current service, or, am I able to downgrade to a cheaper plan?
By now, hopefully, you've been able to reduce your expenses by at least a few dollars a month!
5- Check your pricing
You've probably heard people say that increasing your prices will solve all your worries. Well, it's not entirely true. Increase your prices too far and you risk turning customers off. The difficulty therein lies in the question - what's the best price I should set for my products/services?
Luckily, you're not the first person to ask this question. And luckily, we're not the first people to try and answer it. In fact, we think the Van Westerdorp Pricing Model is a great way to find your pricing sweet spot. If you're interested, we can recommend a great guide with templates and instructions here.
The end result? Based on the survey responses you will get a price range where the majority of people don't think your product is too cheap that they question its quality and your product isn't considered too expensive that they wouldn't buy it. This can help provide great direction around where you should price your product or service.
Last but not least, have confidence that the small changes that you make can have compounding positive effects on your business. Small 1% changes might not feel like much, but make 10 small 1% changes and you've made a big 10% difference to your bottom line!
This information is of a general nature only and should not be regarded as specific to any particular situation. Readers are encouraged to seek appropriate professional advice based on their personal circumstances.