Every entrepreneur knows they need to implement creative thinking. Now more than ever too. The problem is, these entrepreneurs think creative thinking is exclusively reserved for a) the idea and b) the marketing and that everything other than this will be fine following the same old tried and tested business practices and corporate routes used for, like, eternity.
But this won’t work and that’s because creative thinking can be used all over the shop, from improving your customer experience to selling on your old equipment, from the business model you adopt to the way you position your business in the market. The problem is, most entrepreneurs aren’t used to applying a “think outside the box” attitude here, which makes it a bit of a battle at the beginning.
What may help spur you on, though, is knowing how creative thinking can actually boost your profits. That’s where we come in. We want to show you some creative ways in which you can – sometimes dramatically – improve your bottom line, your balance sheet and your overall profits. All it takes is a couple of hours sat down with your business partners and senior management and you will find ways of adapting your business model that works wonders for the only measuring tool that matters in business – how much money you make.
1. Swap The Price Tag
By far the easiest way to improve your profit margin is to raise the price. Now, we know this may sound like a terrible idea because you think you will lose customers, but you won’t, especially if you have been in business for a while. You see, when businesses set their prices, it’s usually during their infancy; when they are still just startups, using low pricing to attract customers. Sure, you may have made a few little price increases every few years, but have you ever sat down with your team and fundamentally rethought your pricing model? It doesn’t have to be much. Something as small as a 3% increase will make a big impact on your annual profits without affecting your customers much at all.
2. What About Vice Versa?
If you’re worried about a price increase scaring off your loyal customers (which it shouldn’t do), then why not think creatively and flip that whole thing on its head. Yeah, we’re talking reducing your direct costs by the same amount. We’re talking about you going to each and every one of your suppliers and asking them to give you a better price. It’s called haggling, we guess. But once again, something as slim as 3-5% shouldn’t be a problem, especially if you and your supplier have been working together for a long old time. In the same way, upping the price of your products or services will boost your profits, so will this, just without your customers seeing a difference.
3. Off-The-Shelf Ain’t All Bad
All businesses require tools and software these days, and almost all blogs and articles will tell you the most productive thing you can do is have these designed and developed specifically for your needs. But that isn’t always the case. Financially speaking, finding an off-the-shelf tool that pretty much matches up with your needs is the way to go because it will be hundreds – we repeat: hundreds – of percent less to buy. Plus, you’ll find that updating the software will be faster and cheaper too because there is a much larger user base. It’s the double-whammy no one is brave enough to tell you about.
4. Rethink Your Buying And Selling
The latest technology, big agricultural machinery, trucks and heavy equipment; whatever it is, the cost of keeping up is extortionate and the price you get for selling them on is laughable. That’s a fact, right? It’s why you’ve not given any creative thought to this process or how you can up your profits here. But what if we told you all that you know was a myth and that some creative thinking was all you need. Things like buying tech from recognised refurbish centres or selling your tech when word comes out about a newer model to offset your costs. Another growing means of buying and selling is to go through auction, in which you can pop onto equifyllc.com for more information, especially when it comes to heavy equipment and the likes of. And, of course, another big trend at the moment is to not buy at all, but choose to rent or lease your equipment as a means of cutting overheads and ploughing large chunks of cash into items that will depreciate faster than Donald Trump’s popularity rating. It’s all a matter of thinking outside the box and seeing what other people are doing too.
5. Very Specific Negotiating
Since the dawn of humankind, the idea of negotiating has been celebrated. But there is one tactic that has been proved to yield an extra .25 to .50 percent on your bottom line without much effort required from you. It is all about negotiating and getting competitive pricing on your merchant accounts. Now, we know .25 to .50 doesn’t sound like much. But let’s say you have $10 million of annual sales, and a profit margin of 15%. Taking off 0.5% in merchant account fees is the equivalent of selling an additional $333,000. That’s an astonishing amount, especially when you accept it’s only going to take about a day, maybe a day and a half, for you or a colleague to negotiate. Clever, huh.
6. Repeat Business Is A Real Winner
Running sales promotions and store deals is a well-known way to capitalise on your existing customer base, especially if you run these campaigns on a periodic basis because you’ll find you draw your customers back in a lot sooner than either one of you intended. The math equation here is simple too: the more frequently you can get your customers to return to the shores of your store the more money they will spend and thus the more profit you will get to enjoy. Of course, to make this work, you need to think creatively on the marketing front. It’s totally worth it, though. “Why?” We hear you ask yourself. Well, to put it bluntly, increasing your repeat business by as little as 5% can increase your profits by up to 75%. That’s got to be worth a punt, right?
7. Feed The Winners In Your Business
We know this may seem more cruel than creative, but this is business we’re talking about and so, as much as you like Karen in sales and Jessica in Marketing, if they aren’t performing to a level that you agreed on, you need to wave bye-bye. It is all about letting the anchors going and feeding the high-performers in your business more incentives to keep the train rolling forward at an awesome rate. It is all about feeding a portion of the time and money you’ve saved from letting go of the underperformers to your best people, a tactic that will greatly improve your profitability. That’s a fact.
8. Perfect The Way Your Present
No, we’re not talking about getting dressed in your most sleek suit, arming yourself with a posh briefcase and talking with eloquence (all though they may help). We’re talking about you presenting the strongest parts and portions of your business so that these are the main focal selling points of what you do. Of course, this requires a little bit of creative thinking and understanding what your USP is. Let’s say you are one of twelve home security companies in your area, but the only one that allows their customers to log onto their iPhones and watch a live feed; make that the focus of what you do. Or let’s say you buy used cars without a fuss, the difference being you match the online quote you give 85% of the time, whereas your competitors lower their quotes 85% of the time. Make this the focus when you present yourself. Of course, if you don’t know what your customers associate you with, then ask them and then capitalise on whatever it is. Not only will this remind your existing customers why they prefer you, it will also help you land new customers, meaning more profit.
9. Increase The Value Your Offer
If there is one thing people and customers want, it’s knowing that they are getting more value for their money. They don’t want the cheapest, they don’t want the most expensive, they want the best value. What’s more, this is a universal fact. As such, you need to find ways in which you can add value. It could be as simple as adding a three-year warranty to your deals or it could mean finding a way to improve the product so it offers more. In return, you’ll find you shorten your sales cycle, increase your ability to close deals, improve your client retention rates and even increase your pricing because, after all, a better product deserves to have a higher price tag.