Five Ways to Increase Profit Margins

In an ever-changing business world, you need to find every opportunity to increase margins. Here are five ways you can increase your margins by 30% or more.

1. Narrow your focus. It is easy to say yes to business, even though it is not exactly what you offer, but this often is a mistake. It is important to assess opportunity costs to see if investing the time and resources is worth it. Apple was successful largely because they knew when to say, "no".
2. Reduce your inventory. Cash can be better utilized then being tied up in inventory. A great book to learn more about "just-in-time production" is The Lean Startup by Eric Ries. This also helps minimize collateral damage when there are flaws in a product or service.
3. Reduce Utilities. Look at your utility bills and find ways to lower these costs by lowering heat and cooling outside business hours. Utilize natural light for all its benefits. Open the blinds. Not only will it lower costs, but according to Harvard Business Review, it may be known as the #1 perk for employees.
4. Surcharge. When a customer pays with a credit card, you are required to pay a credit card processing fee for every transaction (approx 3%). This can add up. Depending on the type of business this can fall around the fourth or fifth line item in an expense report. The economy is going very well right now and people are more willing now than ever to spend a few more pennies for services and products. SurchX offers a free service that enables companies to recover credit card processing fees. This act alone can add up to 30% to your net margin! Click here to schedule a call to see if it is a fit for your company.
5. Inspire your team to be more productive. Everyone needs a pick-me-up sometimes. According to the Harvard Business Review, companies lose over 20% of their productive capacity to organizational drag. It may be as simple as creating a little friendly competition by having your team KPI's on a whiteboard or screen. It may require you to look at your organizational processes. It may need a visit from a motivational speaker (and I don't mean Matt Foley). Each situation is different. Get creative!

These are only five ways to increase your profit margins. There are so many ways a company can increase its margin. What are some creative ways your company increases its margin?