{"id":14991,"date":"2020-08-11T14:32:46","date_gmt":"2020-08-11T11:32:46","guid":{"rendered":"https:\/\/www.become.co\/blog\/?p=14991"},"modified":"2020-10-18T17:10:03","modified_gmt":"2020-10-18T14:10:03","slug":"grow-profitable-business","status":"publish","type":"post","link":"https:\/\/www.become.co\/blog\/grow-profitable-business\/","title":{"rendered":"5 Ways to Grow a Profitable Small Business"},"content":{"rendered":"\n<p><span style=\"font-weight: 400;\">They say \u2018doing what makes you happy\u2019 is the most important part of running a business. But a recent <a href=\"https:\/\/www.guidantfinancial.com\/small-business-trends\/\" target=\"_blank\" rel=\"noopener noreferrer\">survey<\/a> found that only around 40% of small business owners say they opened a business because they wanted to pursue their passion.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">While there&#8217;s no denying that mental health and general happiness should not be counted out of your priorities when operating a business, we all know the <\/span><i><span style=\"font-weight: 400;\">real<\/span><\/i><span style=\"font-weight: 400;\"> reason people start businesses.<\/span><\/p>\n<p><b>To grow profits.<\/b><\/p>\n<p><span style=\"font-weight: 400;\">You could own a restaurant, a real estate company, an e-commerce business, or any other type of enterprise &#8211; but the goal will remain the same. Creating a profitable small business will take work regardless of the industry you\u2019re in, but we\u2019ll show you how to get it done with ease.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Find out what you can do to increase profits for your business just below!<\/span><\/p>\n\n<h2><span style=\"font-weight: 400;\">Ensure you are growing a profitable business<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">What constitutes a profitable business is just making more money than you\u2019re spending, right? It\u2019s actually not that cut-and-dry.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">To increase profits for your business, you need to carefully track the patterns in your finances, find where improvements can be made, adjust accordingly, and continue doing that indefinitely.<\/span><\/p>\n<p><b>Here\u2019s how to get started growing profits:<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">First, make sure you\u2019re keeping a <\/span><a href=\"https:\/\/www.become.co\/blog\/what-is-business-debt-schedule\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span style=\"font-weight: 400;\">business debt schedule<\/span><\/a><span style=\"font-weight: 400;\"> where you keep track of your debts (and pay attention to your <\/span><a href=\"https:\/\/www.become.co\/blog\/permanent-working-capital\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span style=\"font-weight: 400;\">permanent working capital<\/span><\/a><span style=\"font-weight: 400;\">)<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Then, run the necessary equations to determine your <\/span><a href=\"https:\/\/www.become.co\/blog\/gross-profit-vs-net-profit\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span style=\"font-weight: 400;\">gross profit and net profit<\/span><\/a><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Next, <\/span><a href=\"https:\/\/www.become.co\/blog\/profit-margin-formula\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span style=\"font-weight: 400;\">measure your profit margin<\/span><\/a><span style=\"font-weight: 400;\"> (gross, operating, and net)<\/span><\/li>\n<\/ul>\n\n<blockquote>\n<p><b>Note: <\/b><span style=\"font-weight: 400;\">We mentioned restaurants in the intro paragraph above. If you own a restaurant, you should be using a <\/span><a href=\"https:\/\/www.become.co\/blog\/restaurant-budgeting\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span style=\"font-weight: 400;\">restaurant budget spreadsheet<\/span><\/a><span style=\"font-weight: 400;\"> to keep earnings above expenditures and keep growing profits.<\/span><\/p>\n<\/blockquote>\n\n<p><span style=\"font-weight: 400;\">One of the major benefits of knowing your business\u2019s different types of profit margins is that it opens up routes to increase profits. By measuring the three kinds of profit margins, you can find out which part of your business plan needs to be improved in order to grow profit.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Another perk of measuring profit margins is that you\u2019ll be prepared if you ever choose to apply for <\/span><a href=\"http:\/\/www.become.co\/business-loans\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span style=\"font-weight: 400;\">business loans<\/span><\/a><span style=\"font-weight: 400;\">. Lenders also recognize the implications that a business\u2019s profit margins have on that business\u2019s ability to repay loans &#8211; so being prepared to present lenders with that information is a great advantage!<\/span><\/p>\n\n<blockquote>\n<p><b>Note:<\/b><span style=\"font-weight: 400;\"> One more equation you\u2019ll need when you apply for a business loan is the <\/span><a href=\"https:\/\/www.become.co\/blog\/what-is-debt-service-coverage-ratio-dscr\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span style=\"font-weight: 400;\">Debt Service Coverage Ratio (DSCR)<\/span><\/a><span style=\"font-weight: 400;\">. It\u2019s essentially a ratio used to measure the amount of money that your business can afford to put towards paying off its debts. The higher your business\u2019s DSCR, the more able your business is to make debt repayments.<\/span><\/p>\n<\/blockquote>\n\n<p><img decoding=\"async\" class=\"aligncenter size-full wp-image-15010\" src=\"https:\/\/www.become.co\/blog\/wp-content\/uploads\/2020\/08\/GettyImages-1192941332-min-scaled.jpg\" alt=\"Grow Profits\" width=\"1024\" height=\"683\" srcset=\"https:\/\/www.become.co\/blog\/wp-content\/uploads\/2020\/08\/GettyImages-1192941332-min-scaled.jpg 1024w, https:\/\/www.become.co\/blog\/wp-content\/uploads\/2020\/08\/GettyImages-1192941332-min-300x200.jpg 300w, https:\/\/www.become.co\/blog\/wp-content\/uploads\/2020\/08\/GettyImages-1192941332-min-1200x800.jpg 1200w, https:\/\/www.become.co\/blog\/wp-content\/uploads\/2020\/08\/GettyImages-1192941332-min-768x512.jpg 768w, https:\/\/www.become.co\/blog\/wp-content\/uploads\/2020\/08\/GettyImages-1192941332-min-1536x1024.jpg 1536w, https:\/\/www.become.co\/blog\/wp-content\/uploads\/2020\/08\/GettyImages-1192941332-min-2048x1365.jpg 2048w, https:\/\/www.become.co\/blog\/wp-content\/uploads\/2020\/08\/GettyImages-1192941332-min-405x270.jpg 405w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/p>\n<h2><span style=\"font-weight: 400;\">Increase profits<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">One of the best ways to increase profits is to optimize your business\u2019s expenses. Optimizing could mean reducing or eliminating expenses, but either way, you\u2019ll be able to ensure that you have a profitable business by reevaluating your costs.<\/span><\/p>\n<p><b>Examples of areas where you can optimize your business expenses include:<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Customer service<\/span><\/li>\n<li style=\"font-weight: 400;\"><a href=\"https:\/\/www.become.co\/blog\/supply-chain-optimization\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span style=\"font-weight: 400;\">Supply chain optimization<\/span><\/a><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Inventory management<\/span><\/li>\n<li style=\"font-weight: 400;\"><a href=\"https:\/\/fundbox.com\/blog\/5-high-tech-ways-green-business\/\" target=\"_blank\" rel=\"nofollow noopener noreferrer\"><span style=\"font-weight: 400;\">Going green with business<\/span><\/a><\/li>\n<\/ul>\n\n<p><span style=\"font-weight: 400;\">Of course, in order to develop a truly profitable small business, <\/span><a href=\"https:\/\/www.become.co\/blog\/coronavirus-cut-costs-protect-business\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span style=\"font-weight: 400;\">cutting costs<\/span><\/a><span style=\"font-weight: 400;\"> simply won\u2019t do the trick. You\u2019ll also need to employ strategies to actively grow profits, which is what we cover next.<\/span><\/p>\n\n<h2><span style=\"font-weight: 400;\">1. Your business plan should reflect growth in profits<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Having a business plan that\u2019s more than a list of wants is key to building a profitable small business. As tempting as it is to shape your business\u2019s goals around your personal desires, it\u2019s critical that you separate your professional life from your personal one.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">What you need to do is lay out a business strategy that carefully outlines each stage of growth: what you plan to achieve, when you plan to achieve it by, how you intend on reaching those achievements, as well as back up plans in case you hit any speed bumps along the way.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Having a detailed plan will also help by giving you markers by which you can measure your progress.<\/span><\/p>\n\n<h2><span style=\"font-weight: 400;\">2. Know your target audience<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Knowing who your customers are is one thing, but understanding what their needs, wants, and pain points are should be your deeper goal. A profitable business is one that provides a product or service that fills a gap in the customers\u2019 lives. The first step is, of course, finding those gaps.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Once you find out what it is that your target audience wants or needs, you\u2019ll then need to make sure you have a team of experienced salespeople, marketers, and customer service pros who can help keep your business operating at a gold-level standard. Understanding your target audience will ultimately help you keep them coming back, contributing to increasing profit for your business.<\/span><\/p>\n\n<h2><span style=\"font-weight: 400;\">3. Attract new customers<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">A profitable business will, more than likely, have its fair share of returning customers. But if the aim is to increase profits, you cannot rely solely on those \u2018regulars\u2019. You\u2019ll need to find ways of bringing in new customers in order to <\/span><a href=\"https:\/\/www.become.co\/blog\/scaling-your-business\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span style=\"font-weight: 400;\">scale up your business<\/span><\/a><span style=\"font-weight: 400;\">.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">So, how can you attract new customers? One word: <\/span><b>marketing<\/b><span style=\"font-weight: 400;\">.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">With more than <a href=\"https:\/\/cdn.advocacy.sba.gov\/wp-content\/uploads\/2019\/04\/23142610\/2019-Small-Business-Profiles-States-Territories.pdf\" target=\"_blank\" rel=\"noopener noreferrer\">30 million small businesses<\/a> in the United States, it&#8217;s crucial to be unique if you want to bring in customers. Creative marketing strategies will help you maintain a steady stream of quality leads which will [ideally] result in growing profits. This is true for businesses in all different industries; see:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><a href=\"https:\/\/www.become.co\/blog\/e-commerce-advertising\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span style=\"font-weight: 400;\">E-commerce advertising<\/span><\/a><\/li>\n<li style=\"font-weight: 400;\"><a href=\"https:\/\/www.become.co\/blog\/real-estate-marketing-tools-strategies\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span style=\"font-weight: 400;\">Real-estate marketing<\/span><\/a><\/li>\n<li style=\"font-weight: 400;\"><a href=\"https:\/\/www.become.co\/blog\/social-media-marketing-for-small-business\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span style=\"font-weight: 400;\">Social media marketing<\/span><\/a><\/li>\n<li style=\"font-weight: 400;\"><a href=\"https:\/\/www.become.co\/blog\/lead-generation-contractors\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span style=\"font-weight: 400;\">Contractor marketing<\/span><\/a><\/li>\n<li style=\"font-weight: 400;\"><a href=\"https:\/\/www.become.co\/blog\/dental-practice-marketing-strategies\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span style=\"font-weight: 400;\">Dental marketing<\/span><\/a><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Etc.<\/span><\/li>\n<\/ul>\n\n<blockquote>\n<p><b>Important:<\/b><span style=\"font-weight: 400;\"> When it comes to marketing and attracting new customers, there are a number of metrics that you\u2019ll want to pay mind to in order to measure profitability, including cost per acquisition (CPA).<\/span><\/p>\n<p><strong>Use the following equation to determine your business\u2019s CPA<\/strong><\/p>\n<p><img decoding=\"async\" class=\"aligncenter size-full wp-image-14994\" src=\"https:\/\/www.become.co\/blog\/wp-content\/uploads\/2020\/08\/Net-Profit-min.png\" alt=\"CPA Formula\" width=\"887\" height=\"207\" srcset=\"https:\/\/www.become.co\/blog\/wp-content\/uploads\/2020\/08\/Net-Profit-min.png 887w, https:\/\/www.become.co\/blog\/wp-content\/uploads\/2020\/08\/Net-Profit-min-300x70.png 300w, https:\/\/www.become.co\/blog\/wp-content\/uploads\/2020\/08\/Net-Profit-min-768x179.png 768w, https:\/\/www.become.co\/blog\/wp-content\/uploads\/2020\/08\/Net-Profit-min-604x141.png 604w\" sizes=\"(max-width: 887px) 100vw, 887px\" \/><\/p>\n<\/blockquote>\n\n<h2><span style=\"font-weight: 400;\">4. Grow your business<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Growing your business isn\u2019t exactly the same thing as increasing profits, though the two do tend to go hand-in-hand. Expanding your business can be done in various ways, including:<\/span><\/p>\n<ul>\n<li><b>Organizing <\/b><span style=\"font-weight: 400;\">your business\u2019s operations and systems to get more done<\/span><\/li>\n<li><b>Opening <\/b><span style=\"font-weight: 400;\">a new location<\/span><\/li>\n<li><b>Offering <\/b><span style=\"font-weight: 400;\">new types of products or services<\/span><\/li>\n<li><b>Optimizing <span style=\"font-weight: 400;\">your business\u2019s online presence<\/span><\/b><\/li>\n<\/ul>\n\n<p><span style=\"font-weight: 400;\">Each of those tactics can lead you towards developing a more profitable small business, though it should be noted that since the Coronavirus outbreak, strengthening your business\u2019s online presence has become even more important.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">More and more businesses are adding a focus on their online operations, leading to more competition and a greater need among existing online sellers for <\/span><a href=\"http:\/\/www.become.co\/ecommerce-loans\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span style=\"font-weight: 400;\">e-commerce business loans<\/span><\/a><span style=\"font-weight: 400;\"> so that they can stay ahead of the race. If you already have an online store, you can use the additional funding to build your brand, start new marketing campaigns, get into multi-channel selling, and much more.<\/span><\/p>\n\n<h2><span style=\"font-weight: 400;\">5. Business development to help you become a profitable small business<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Business development refers to the pursuit of opportunities to increase profits through strategic means. Often times those \u2018means\u2019 may come at a monetary cost, but not always! You can use some of the following strategies to develop business and increase profits for little-to-no cost:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Building new <\/span><a href=\"https:\/\/www.become.co\/blog\/how-to-find-business-partner\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span style=\"font-weight: 400;\">business partnerships<\/span><\/a><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Finding new markets to enter into<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Creating incentives for client referrals<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Attending networking events for your industry<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Learning from online resources (e.g. webinars, podcasts, YouTube channels)<\/span><\/li>\n<\/ul>\n\n<p><span style=\"font-weight: 400;\">With each business development tactic that you utilize, you\u2019ll be helping to build an even more profitable business.<\/span><\/p>\n\n<p>With e-commerce on the rise, you may be wondering if it&#8217;s time to take your business online. To help you decide, read this: <a href=\"https:\/\/www.become.co\/blog\/ecommerce-faq\/#Q100\">How profitable are online retail stores?<\/a><\/p>\n\n<h2><span style=\"font-weight: 400;\">Get started<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Make sure to <a href=\"https:\/\/www.become.co\/shopify\/landing\/?utm_source=blog&amp;utm_medium=article&amp;utm_campaign=grow-profitable-business\" target=\"_blank\" rel=\"noopener noreferrer\">track your profit and expenses<\/a>. And then, with these 5 ways to grow profits, you have a firm foundation that can help you get started off on the right foot. <br \/><br \/>Yes, it takes work to get it done, but building a profitable small business will prove to be worth your investment. Keep this article bookmarked for your future reference, and be sure to share it with other business owners who can use the information!<\/span><\/p>\n<p><a href=\"https:\/\/www.become.co\/apply\/?k=blogbanner\" target=\"_blank\" rel=\"noopener noreferrer\"><img decoding=\"async\" class=\"aligncenter size-full wp-image-11643\" src=\"https:\/\/www.become.co\/blog\/wp-content\/uploads\/2020\/02\/Franchise-2-min-scaled.jpg\" alt=\"\" width=\"1024\" height=\"341\" srcset=\"https:\/\/www.become.co\/blog\/wp-content\/uploads\/2020\/02\/Franchise-2-min-scaled.jpg 1024w, https:\/\/www.become.co\/blog\/wp-content\/uploads\/2020\/02\/Franchise-2-min-300x100.jpg 300w, https:\/\/www.become.co\/blog\/wp-content\/uploads\/2020\/02\/Franchise-2-min-768x256.jpg 768w, https:\/\/www.become.co\/blog\/wp-content\/uploads\/2020\/02\/Franchise-2-min-604x201.jpg 604w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>A profitable small business will take work regardless of the industry you\u2019re in. Learn the top tips on how to grow profits with ease with this detailed guide.<\/p>\n","protected":false},"author":1,"featured_media":14998,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[13,114,1,12],"tags":[36,308],"class_list":["post-14991","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-aus-resources","category-small-business-wisdom","category-uncategorized","category-us-resources","tag-business-finance","tag-profit"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>5 Ways to Grow a Profitable Small Business - Business Funding Blog<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.become.co\/blog\/grow-profitable-business\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"5 Ways to Grow a Profitable Small Business - Business Funding Blog\" \/>\n<meta property=\"og:description\" content=\"A profitable small business will take work regardless of the industry you\u2019re in. 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