5 Ways to triple your business profits-Part 1

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Most people will have heard of the "˜4 Hour Work Week' by Timothy Ferris, about how we can work less and get paid more by working smarter. I have applied such thinking to my own online business and listened to other great internet marketers such as Rich Schefren, Howie Schwartz, Brian McCelroy, Dennis Becker and Rachel Rofe.

I want to give you 5 ways that I have found to work which has doubled my business sales, tripled the bottom line and halved my advertising budget.

inovateWhen I first started writing this article I expected it to be around 1200 words for the whole 5 ways of doubling your business sales, but when I got started I soon realised I had a lot more to say than 1200 words. So I have written about 1500 words for each part.

For regular readers you will know I own where I sell binaural beats to the public for better health and relaxation, I also do affiliate marketing which I won't talk so much about as I don't want to give away my niche.

Anyways, when I first started out I thought if I sell the downloads of the binaural beats cheap I will get loads of vistors to the site and loads of sales through word of mouth.   Well the first month of going live, and it was a soft beginning, which meant I didn't really shout at all about the opening of the site, I made 6 sales at $29 for each download.   I then received a message from someone else who was selling downloadable binaural beats basically saying that I should not under price my product as there were others out there selling binaural beats for up to $1000 per set.   I thought about this for a bit and obviously I knew that my competition would not want me selling cheap for obvious reasons but I thought about the psychology of it, if a product seems to cheap then it can't be any good which means a lot of people wouldn't buy it purely for the fact that it seemed to cheap.

I then braced myself and doubled the price of my product and waited to see what would happen.   After two days, absolutely nothing, on the third day a few questions from prospective buyers, on the fourth day 2 sales at $69 each. I'd raised my prices by $40 and I was still getting sales.   I kept it at the new price and I am still getting sales and with over 90 sales I have only had 1 return which is not bad going for a clickbank product.

As you know I have been affiliate marketing for a few years and I have also started up an internet marketing arm of the business offering advice to offline businesses. I was speaking with one of my clients a few days ago about a making them a website and do internet marketing for a fixed fee and monthly fee thereafter.   We sat down and discussed her business which was a service she offered to the public.   I gave her five pieces of advice for free which will bring in an extra $10,000 – $30,000   per year.   This woman's business was run on word of mouth alone and she had a great reputation for what she did which was to make custom made curtains and pelmets for clients.   She had made our curtains and pelmets for a great price.   After the job was done we had a word about her business and I asked a whole load of questions about her business and her marketing and she said she didn't do any marketing, it was all word of mouth.   I asked if she would like more business and how much she could handle; the answer? Of course she would and could handle a lot more.

We sat down and went into more detail about her business and looked at her competition to find out what they were charging for their service.   It turns out she was one of the cheapest on the market in her area.   I gave her 5 pieces of advice which I know will increase her sales, triple her profits and half her workload.

5 Ways to double your sales and half your workload – Part 1

1. Increase your price

You might have guessed it already, the first piece of advice I would give to businesses offering a service of some kind would be to increase their price by at least 50%.   I can almost hear the screams of abuse at this piece of advice; we're in a recession for goodness sake why on earth would I raise my prices? but hear me out, (and by the way we're only in a recession because the media say we are).   If you are offering a service to people and you have taken the time to get qualifications in your area of expertise and are considered a professional then increasing your price should be a natural way to build your business but most business owners don't think like this.

They start out in business offering a service cheaper than most to build the business and get a reputation.   However, once the business has been established and the reputation gained they keep the prices the same as before, why? They don't want to rock the boat, they are fearful that if they put the prices up the buyers will leave.   This is not true.   If you have a great reputation and people trust you, they will happily pay you the extra 50%.   Yes, you will get customers who leave you but you will also gain new customers with smart marketing.

If you are a business owner who sells products you obviously can't sell your products with a 50% increase? You can, depending on what you are selling.   One of my clients, a computer shop owner, put a new type of motherboard   in his custom built computers which greatly increased the performance of the computer.

His new motherboard was 50% more expensive to buy.   After talking about it we marketed the benefits of the new motherboard and he increased the price of that computer model with the new motherboard by 50% and it is now the bestselling computer in his shop.   Lets look at the numbers for the computer shop owner.

Price Sales per month Cost to build Profit Total Profit for month
Old Computer $800 25 $530 $270 $6750
New Computer $1200 25 $630 $570 $15250
Increase 50% 19% 111% 111%

As you can see from the table above the main points are, The cost to build the computer was 19% more as the motherboard had gone up in price by 50% but the rest of the components of the computer stayed the same price.   So although it was more expensive to build we still increased the overall price of the computer by 50% and gained 111% increase in profit, amazing!

Okay you might think we were being a bit greedy here.   So lets just say you increase the price by 25% which is just over the amount it costs extra to build the computer.

Price Sales per month Cost to build Profit Total Profit for month
Old Computer $800 25 $530 $270 $6750
New Computer $1000 25 $630 $370 $9250
Increase 25% 19% 37% 37%

You still increase your profit by 37%.   The above tables do not take into consideration the increased amount in sales for the new computer as they were marketed as having the latest new motherboard and we marketed all the benefits of the new motherboard, not to mention the increased business through word of mouth. So by adding an extra high end component we have increased the sales and increased the total profit by 111%.

Work out your numbers on your business and see if adding an extra 20-50% would make a difference.   I think you'll be surprised at the numbers it throws out.

A lot of people who own a service-business are afraid to raise their prices for fear of losing customers.   You are always going to lose a few customers along the way no matter what you do so why not increase your price, increase your customer service and lose a few old customers and gain a few new ones.

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About the author

Steven Aitchison

Steven Aitchison is the author of The Belief Principle and an online trainer teaching personal development and online business.  He is also the creator of this blog which has been running since August 2006.