The average healthy profit margin for a small business is between 7% and 10%, depending on the sector. For example, a dog grooming business would likely have a higher average profit margin than a restaurant as food service is notorious for its razor-thin margins. How do your small business’s profits compare to this benchmark?
While the answer to that question will depend on many factors, from the age of your business to the products and services you offer, it’s worth considering ways you can boost your profits. Implementing other revenue streams in addition to your core offerings is a great way to secure more revenue and improve your financial security.
To help you get started, we’ll walk through a few ideas you can employ to start bringing in more money, whether you run a dance studio or a local gym. Let’s begin!
These are just a few options—remember to select an idea that will be appealing and engaging to your target audience. One way to engage attendees is through gamification. You might use an event gamification app to assign points to a certain action. Then, grant attendees points toward some kind of prize or incentive, like a percentage off their next purchase, when they buy a product or attend an event.
Loyalty programs are a lower commitment option that some customers might prefer. Gingr recommends using them to show your appreciation for top customers, making them feel valued and more likely to return. Once they sign up for the program, you can track their purchases using a digital points system, app, or punch card—then, reward them with discounts or free items when they hit a certain threshold.
Make sure you’re selling items your customers will want to buy and use. For example, your dance studio could sell duffle bags with your logo on them in addition to athleisure-style apparel. And before ordering any inventory, always weigh the costs of manufacturing, shipping, and storage against projected profits. Otherwise, your merchandise could end up having a negative impact on your bottom line.
Your merchandise represents your business, so think about how to convey your core mission and values with your designs. Poor design—think blurry, stretched graphics and most instances of the Comic Sans font—can send the wrong message about your business identity and practices. However, a unique, professional-grade design that matches your business’s logo, colors, slogans, fonts, and style can make your merchandise stand out and attract attention.
You can even go a step further and use your merchandise to promote and rally support for a cause you care about. For example, 360MatchPro’s cause marketing guide recommends partnering with a local nonprofit to sell merchandise to support a specific cause, donating a portion of the proceeds to the nonprofit organization. This can help you cultivate a reputation as a company that gives back and cares about its community.
When you dig into your niche and your customers’ unique pain points, you’ll start to see plenty of opportunities. For example, if you run a dog boarding business, you might know which dogs are more anxious and offer their owners home pet-sitting services for an additional charge. Don’t be afraid to get creative, test out new ideas, and go back to the drawing board if you have to.
Whether you’re launching a new line of services or simply setting up a loyalty program, adding a new form of revenue is an exciting time for your small business. However, don’t let outdated systems hold you back or make a mess of your financial data.
Robust business management software that’s tailored to your niche will help you keep everything organized and streamlined, giving you more time to speak with your customers, develop creative marketing strategies, and come up with your next big business idea.