What if the thinking of a small business owner suddenly shifted, with conviction, to the understanding that the only avenue to profitability is the deep knowledge of yourself and your customer or client? Since profitability is the name of the game, how can you, any longer, think any other way? You simply can not afford to. Step one, get out of the low-profit or and I hate to admit this for some, the no-profit model. Build a new model to satisfy your interest in the highest profitability.
Invest the time to unhide the long list of your customers’ needs and desires so that your culture, products or services and solutions will be incorporated to their every day lives. Shift your focus on the real needs of your tribe. The knowledge of your crowd will create the meaningful solutions to their problems. Surveys, participation on chats, one-to-one with customers or clients as well as understanding deeply your records and data collected, are few of the ways to accomplish that.
Building a tiered set of products could be very profitable. You will have a low end product which will prevent your competition from entertaining thoughts of stealing away your customers. This is your low end profit-protector product. Your next level should be occupied by your main product; the solid profit maker preferred by the masses. The third level up is where your prized product is; the one that a lower percentage of your customers can afford but they will still lust to purchase since it is of superior quality. You may even add another product to the top of this pyramid where only your elite circle can afford but it will represent the Everest of your products or services.
The platforms that you could display your products will provide an opportunity for different profitability. Selling your product through a brick and mortar store is different from selling it at the HSN, at trade shows, from your website, through join ventures, licensed or on consignment. Explore as many platforms as possible, as each will provide you with additional profits on all different levels. Be open to pathways even foreign to you; the world is ever changing.
Investigate your fixed costs, to start on your journey to bring down your breaking point. Next step is visiting your suppliers: accept nothing else than the best pricing as well as their support in providing you with fresh ideas on cost-cutting. Be clear with your staff on frugality and your absolute commitment to cut costs. Ask for their input on cost reduction ways. Always remember that common sense is the forgotten way of doing business which includes you playing with the math and doing your numbers with urgency as well as energy.
Protect your brand. It will require persistence but brand recognition will make you enjoy the ability to charge higher prices and thus higher profits.