8 Tips to Increase Turnover
How to increase sales, generate new and keep old customers, and manage cashflow to maximise your small business' turnover
It’s no wonder that when small businesses approach banks, independent lenders and even external investors for business funding, the usual question is: ‘What’s your projected annual turnover?’
By turnover, we mean income that a business receives from its operational activities, usually from the sale of goods and services. Every small firm will aim at making profit but you will need to generate income before making any gains.
Below are 8 useful tips that could help your business increase its turnover – there’s bound to be one that you could implement today.
Be aggressive with sales
Invest resources in increasing your sales volume. Improve your sales process and/or get some sales training, if needed. Successful businesses are those that take orders and ensure that the final product/service is delivered. A clever way of increasing your turnover is to offer limited luxury services/products – which acts as an incentive for most customers to buy. (See Increasing your Sales)
Understand your customer base
Without customers, you would NOT have any income. Categorise your customers in terms of the income they bring into your business. Focus your efforts on your most valuable customers and give them the most favourable rates – as they will always come back. Create a referral system through your customers as this will generate more customers for your business. (More information in the article Understanding Your Customers)
With every business, there’s bound to be competition – even for a sole proprietorship. Compare your quality and pricing with competing products and services. By analysing your competition, you should get a rough idea on how to price your goods and/or services. Aim to charge a ‘full’ price and offer value for money for your products/services. Always ensure that your products/services stay ahead of the competition. (See Researching Your Market: The Competition for further advice)
Turnover is income received in the form of cash or cash equivalents – such as outstanding invoices. However, though these invoices are recorded as income receipts, you do not actually receive any cash payments. Invoice finance (factoring or invoice discounting) is a financing solution that transforms your unpaid invoices into cash of up to 90% of the invoice value. The remaining balance is paid to you once your customer settles their invoice, less any charges. (More info in our article The Difference between Factoring and Invoice Discounting)
Top up your customer service levels
Adopt ‘the customer is always right’ attitude. Endeavour to make the most income with every sale – this could be achieved by offering value-added services as this encourages your customers to use more and more of your services/products. Enquire on what your customer needs your services/products for. That way, you will be able to suggest alternatives. If this is not your strong point, you could get some sales training. (Read more in the business advice article Managing Your Sales Team: Training and Development)
Offer special promotions and discounts
Offer incentives to repeat business customers – they will always be encouraged to use your services in the future. This could be via a rebate system linked to the volume of sales or special discounts to loyal customers. Do not drop your margins – rather try alternatives such as ‘buy one get one free’ discounts, solid guarantees, 10% discounts on selected products are a few ideas.
Your clients should know about all your services – they don’t have to buy it instantly but they should know you offer it. If your business doesn’t have a website, then this might be your most profitable investment. Make full use of the social and traditional media to market your services/products. (Read more about Marketing Strategies)
Use of Incentives
Monitor and measure employee performance and results and reward employees by linking their pay to productivity. Ensure that all your employees are fully aware of the business’ motive – to make profit. By encouraging your employees, they could improve their service levels,and hence the possibility of higher turnover. (Take a look at our business advice article on Incentive Pay)
You will be amazed can how much your turnover can increase with these simple tips. There’s an old saying – “turnover is vanity, profit is sanity”. Increasing your turnover also means having a firm grip on your costs.
This business advice article is from www.invoicediscounting.uk.com