How To Increase Turnover
The aim of every small business is to make a profit; that goes without saying. In order to do this effectively, income must be generated so that gains can be made. This income is referred to as ‘turnover’ and a healthy annual turnover is what lenders want to see before committing to supporting a small business financially. So, how do you increase that all-important turnover figure and keep growing? Here are some tried and tested marketing tips which I hope you can use to help your business flourish.
Sales and marketing trategy
Although this approach may be unpalatable to some, adopting an aggressive sales stance will generate more revenue for your business. Sales of goods or services are vital to enhancing your annual turnover figure and this area is well worth investing in both in terms of experienced sales staff with proven track records in your field and in technology to support them.
Try offering a limited edition of your top-end products/services. Statistics show that this type of offer will draw interest from the top 5% to 15% of your client base.
Motivate your sales staff by offering incentives. This may be in the form of financial reward for sales volumes or whatever other medium you feel most appropriate.
Know your customers
Without customers you clearly would not have anyone to sell your product or service to. It’s important to know who they are and what they bring to your business. Carry out some detailed analysis on your client base and categorise your customers in terms of the revenue they generate for your business. Concentrate most on those who bring in the most business and don’t expend effort on those who complain continually about your pricing or are bad payers.
A really useful and profitable exercise is to devise a referral system using your best customers as a starting point. This is akin to throwing stones in a pool and watching the ripples spread; if each of your top 50 clients sends a referral of similar calibre your way and they in turn do the same the potential for growth and increased turnover is virtually limitless.
Beat the competition
No matter what business sector you’re in there will always be an element of competition. Analyse your competitors and adjust your quality and pricing accordingly. If your product or service is of better quality and reasonably priced in comparison to your nearest rival, you stand a really good chance of relieving them of some of their clients and picking up new ones who will choose your company having done their own research.
Turnover is made up of cash or its equivalent and this includes outstanding invoices. Although these invoices are shown through your company accounts as income, you may have a fair amount of cash in the pipeline because of your credit terms which could be up to 90 days in some cases.
Factoring or invoice discounting as it’s referred to is a financing solution through which you can convert up to 90% of the outstanding invoice value to cash. The remaining balance will be paid to you, minus charges, when your client pays the invoice in full. This is very good way of freeing up cash for your business when you need it without you having to wait for it, particularly if some of your customers are inclined to wait until the latest possible date before coughing up the cash.
It’s been said a million times and for very good reason; “the customer is King”. Look after your clients and they will keep on coming back to you. Try to generate the most revenue you can from every sale. Get creative and come up with incentives to encourage your customers to buy more; this could be through sales or value-added offers.
A good strategy is to talk to your customers. Find out what they want your product or service for. This places you in a strong position to suggest alternatives or extras your client might not have considered. Not only will you present a caring and thoughtful front, you could also gain extra sales, repeat business and referrals.
Take this one step further and formulate a rebate or loyalty system where customers qualify for special discounts, exclusive previews of the latest products offered at a special introductory rate etc.
By implementing all or just one or two of these ideas and developing them yourself, you will increase your business turnover. Make it your business to revisit all of the above regularly to check that you’re on track and that you haven’t missed an opportunity somewhere along the line. Keep an eye on costs too; the more streamlined and efficient your business, the more healthy your turnover will be.
About Alison Page
Alison is a small business owner, freelance writer, author and dressage judge. She has degrees in Equine Science and Business Studies. Read her full story at http://www.theladywriter.co.uk