Revenue, defined broadly as the total amount of money brought in by business operations over a set period of time, is an important driver of growth and an indicator of a business’s overall financial health. It’s also an important factor in qualifying for a business loan or attracting investors.
Over half of small-business owners in the U.S. experienced an increase in revenue from 2021 to 2022, according to a 2023 small-business report by Bank of America, and over 60% expect to see revenue increase even more within the next year.
If you’re looking to boost revenue for your small business, places to start include marketing, building a customer base and adding new products. Several experienced small-business owners share tips on ways to execute revenue-boosting strategies.
1. Build your network
Al Everett, a SCORE mentor and owner of Thrive, a real estate and construction company based in Traverse City, Michigan, emphasizes the importance of a network to drum up new business, estimating that he gets around three to four new leads a week, all from people in his network.
In addition to building a customer base, word-of-mouth referrals can be especially powerful for profitability, Everett says. “You don’t have to worry about lowering prices to get the projects or get the clients because they come to you because of your reputation. And you were referred to them,” he says.
As far as building and maintaining your network, Everett says to keep it simple. That can mean joining local business networks or interest groups, but it can also mean setting aside a small amount of time every day to reach out to contacts over the phone. Even eight to 10 calls a day amounts to 40 to 50 people you’ve touched in a week, he says.
2. Diversify products and income streams
Diversifying price points and product offerings, especially during times of economic uncertainty, can help bring business in the door, according to Christy Price, a web designer and owner of Christy Price LLC, a web design firm based in Austin, Texas. “Think about accessibility” and consider offering scaled-back versions of your products or services to appeal to a wider audience, Price says.
For example, her “designer for a day” service was especially popular during the COVID-19 pandemic. By offering clients five hours of her time for a flat rate, instead of a custom website build that would be invoiced at the end of the project and usually at a much higher total price, she was able to meet customers where they were financially.
This diversification has also made customers more comfortable investing in her costlier products and services. By enrolling in an inexpensive course, Price says, clients can get an understanding of the value they’ll get from her teaching style, which often leads them to purchase other courses or digital products. “I feel like people are still willing to invest,” she says. “They’re just more cognizant of the price point and what their budget is.”
Price has also boosted revenue by diversifying her income streams. Her blog, which she started to direct traffic to her website, now also earns her affiliate marketing income on some of the products and services she reviews and recommends.
3. Cut back on expenses with automation and negotiation
Reducing business expenses helps free up cash to not only reinvest in revenue-boosting strategies, but also to help keep your prices steady, allowing you to retain and attract customers. “Strategically identifying” areas of your business that can be automated is an effective way to cut back on expenses, according to Jennifer Glanville Love, director of partnerships and collaborations at Boston Beer Company, who also oversees Samuel Adams Brewing the American Dream, a lending, coaching and networking organization.
Everett has used artificial intelligence to draft real estate contracts and listing descriptions, which has saved him thousands of dollars in legal fees and hours of time. Just make sure to check the sources that the AI is using, he says, because “the data is only as accurate as what is in their database.”
If you don’t have a lot of overhead to cut back on, you may consider creative ways to reduce spending, such as negotiation. Everett’s company, for example, was able to lock in future rates and secure better payment terms by agreeing to do business exclusively with one contractor. These favorable terms allow him to keep his prices competitive, plan strategically and stay on top of payments to the contractor.
4. Prioritize authenticity
Regardless of your industry, it’s important to lean into what makes you and your business unique. Something that Glanville Love emphasizes is sharing the personal business story. “No two entrepreneurs have the same journey,” she said in an email. “It is in those unique backgrounds and experiences that a customer can really connect with the business and foster long-standing brand loyalty.”
Similarly, Price says finding a unique and authentic niche is the key to a successful blog. Everett says the same thing goes for networking interactions and phone calls — don’t sell, have a conversation and touch base with people, and lead with how you can help them. That way, when they think of your industry, they think of your business.
Above all, it’s not the product that sells, Everett reminds small-business owners, but rather the individual behind it.
Olivia Chen
Source link
