Small business owners are always looking for ways to increase their revenue, and the good news is that there are actionable tactics to achieve that goal. By focusing on key areas of your business, you can identify opportunities to improve and set attainable goals to benefit your bottom line. Here are five tips from Live Oak Bank:
Become a Market Expert
As a business owner, it’s essential to know your market, especially if your industry is typically tied to a specific geographical area. Strive to be an expert in your market. Your expertise can help streamline your marketing expenses, increase your return on investment (ROI) on marketing dollars and help you attract the right customers that fit your pricing model.
Price for Profitability
Improper pricing can cause cash flow shortfalls. Determine what your goods and services are costing you and develop your pricing model accordingly. By creating healthy margins, you achieve a consistent pricing model that can scale as your costs of goods, services, labor, etc., increase over time. Pricing and expense management establish the business’s profitability, so it is crucial to have a plan and remain disciplined.
Drive Business Metrics
Identifying essential business metrics and understanding how to influence them puts you in the driver’s seat when responding to challenges and opportunities. EBITDA, or Earnings Before Interest, Taxes, Depreciation and Amortization, is an excellent way to track and assess the overall financial health of your business. Establishing your EBITDA targets for the upcoming year can help determine your business’s required revenue and expense structure. Base your revenue targets on your project price per call and your projected call volume for the year.
Invest in Your Staff
Having each staff member trained adequately in selling products and services and representing your business can often be the difference in hitting financial goals. Encourage each staff member to have personal and professional goals and provide them with opportunities to achieve them. Having employees who are empowered and in control of their success can result in more fulfilled employees, happy customers, and a highly profitable business.
Set Goals for Growth
Understanding your business’s current cash flow, market, and financial health is a prerequisite to business growth. Then, when you’re ready, expanding your business can increase market and revenue share. As you grow, so do your balance sheet, executive team, and experience. Live Oak Bank can support the evolution of your business with access to capital. SBA loan programs have low down payments and competitive terms and can be an excellent solution for growing businesses that need loans up to $5 million.
