Welcome to our two-part series on increasing profits! In these two blog posts, we will be sharing a few tips on how to increase profits for your trades or construction business. If you find them helpful, please let us know!

Before we jump into the first one, please note that all of these actions start with reviewing your numbers to make sure you know where things are at before jumping into changing anything. You want to make sure you’re addressing the correct situation!

And lastly, remember that there usually isn’t a magic bullet solution. Oftentimes, improvement involves evaluating the situation, putting together a plan in writing, and doing your best to stick to it. By monitoring and continually improving the situation, you can make a tremendous improvement over time.

Tip #1: Raise prices. This one is obvious, but it’s a good place to start! If your prices are too low, it’s going to be tough to turn a good profit. When setting your pricing, it’s important to think of all of the costs involved in delivering your service and running a business. These can be broken down into your direct costs as well as your overhead costs.

On the other hand, if your prices are too high, it could cut into your sales and cause your customers to go to the competition. So in addition to understanding your costs, it’s a good idea to understand the market rate to set a reasonable expectation as well. This doesn’t mean you can’t be more expensive than your competitors - it’s just an important point to think with.

Tip #2: Increase the number of customers (of the type you want)

This is another obvious one. How can you go about increasing the number of customers? A couple of ideas are:

• Developing sales techniques for your team (or you if you’re doing the sales)

• Creating a targeted marketing campaign

By developing sales techniques and standard procedures for such, you should be able to increase your closing rates. As your team grows, how will you duplicate the effectiveness of your sales? By training your sales staff and having a standard sales process, this should help to increase your closing rate and thus increase your profits.

As far as targeted marketing goes, this will help you to attract the type of customers you want. If you don’t have a specific target customer you’re going for, you can work this out for yourself. And from there, get a good marketing campaign going to attract the customer you want.

Tip #3: Increase the number of repeat customers.

Repeat customers are nice, as they are often paying or coming back for more services without more sales/marketing being sent in their direction. They are already sold on your company! What are some good ways to have them coming back?

• Develop recurring revenue - such as maintenance plans.

• Delivering excellent service. If they’re happy with your service, they will want to come back the next time they are in the marketing for your business’s services. A key step for this as well is documenting processes and training your delivery staff to treat the customer well and make them feel valued.

• Having quality control measures in place for your team. This one ties into the last - specifically, having processes in place for your team to do the work efficiently and correctly, as well as setting up a process to verify the work was done correctly. This will help to make sure the customers are happy and their problems are being handled for them.

Tip #4: Increasing the average value of each sale. Here are some ideas on how to accomplish this:

• Upselling - part of your sales process would ideally include a way to upsell a customer for additional services or materials that your business provides.

• Bundling services. This can be a way to get a higher value per sale. Although a useful strategy, keep your profit margins in mind so as not to price the bundles too low. When done correctly, this can be a handy way to increase sales.

Stay tuned for our next blog post! If you would like help reviewing your numbers or finding out more about our services, schedule a free consultation: Click here to schedule your free consultation