When you have got a business that you can continue and sustain, what’s the fastest way to make it profitable?
There are a few pointers you can take note of to make your business profitable.
Focus on the marketing.
In any business, number 1 is leads. Every single day, you have to track and measure your leads. How many leads did we generate this month? How many leads did we generate this week?
Most businessmen when you ask them, what will they say? I am not sure, I have to check. It has to be at your fingertips. You have to track your leads and constantly experiment using new strategies and new techniques to increase leads.
Advertising as an investment.
The best way to increase leads is through advertising right. Now, is advertising an expense or is it an investment? I always ask people that question.
If you throw in an ad and you don’t measure the leads, it’s an expense. If you throw in an ad and you don’t make money to cover it, it’s an expense. But if you throw in an ad and you track your response, and if for every dollar you spend, you get a dollar and twenty cents back, it becomes an investment.
So if you put in a dollar and you get back a dollar twenty. What’s your return? 20%. Your ad is an asset; it just could give you 20%. So how many dollars would you put in if you get a dollar twenty back? You put in as many as you can. You just keep putting it again and again. But all of us know that there’s this thing called the Law of Diminishing Returns.
As you keep putting ads, your returns will drop from a dollar twenty and drop to a dollar ten. So what happens. Do you give up your ads? No. you create new ads. And the moment you create new ads with a bit of different skew in that headline, what happens. Your return will again jump up. So that’s the first thing.
Focusing on the conversation rate.
Experimenting with new ways to increase conversion is very important. One way to do this is through creating a community. It’s easier to resell to a current client than it is to sell to a new client. So by making sure the moment you get a client, the same person comes back again and again and he brings all his friends. This will end up in better conversions as we all know that referrals through friends have a high rate of conversion.
Focus on margins
The last pointer is to constantly focus on your margins How can you do something more cost effectively, yet not compromising on quality. A lot of people ask this question. How do I know when I should hire someone? Or should I just do it myself?
The answer is this, when you hire someone, are you hiring an asset? If you’re paying the person $3,000, is the person making back for you another $3,000? If by hiring this person you can make $6,000, invest in that person. If by getting that person at $3,000, you lose that $1,000, then it’s not a good investment. So look at things from an investment perspective, from an asset perspective.
Here you have it, the key pointers that you can apply to your existing business and making it more profitable.