3 Hidden Profit Leaks Plaguing Your Bottom Line

Most small business owners know that they must increase sales in order to improve their bottom line. But often lurking behind the scenes is are profits leaks creating a costly situation — common revenue building techniques that are actually causing your profits to leak out of your bank account.

Now I know that common advice out there is to just focus on marketing your offers and getting more sales in the door.

But if you want to start being more profitable, you’ll need to make sure you aren’t making one of these profit-boosting mistakes:

1. Generating non-ideal prospects

A common mistake, generating non-ideal prospects is a fast way to burn through your profits. Often entrepreneurs make the mistake of marketing to EVERYONE hoping that it will lead to increased sales. But what often happens is you spend a LOT of time and money trying to convince people who can’t (or won’t) buy your stuff to invest. Instead of ramping up revenues it ends up costing you and your team precious bandwidth.

Profit Explosion Solution: Identify who your sweet spot market is and focus your marketing efforts on prospects who meet that criteria. Get more discerning about where you speak or how you drive traffic to ensure your traffic matches your target audience.

2. Too many offers

If a small business owner has too many offers they end up spreading their marketing and sales efforts too thin and will eventually have minimal sales that require massive amounts of time and energy to nurture. Having too many offers is an indicator that an entrepreneur doesn’t have a strong enough sales system so they tend to keep creating new products trying to get “something” to work in the market (or they just have creativity addiction and can’t stop themselves!)

Profit Explosion Solution: Identify your highest profit generating offerings and design a system to sell a lot of them! When you which of your offers you sell the most of, put 70% of your marketing and sales efforts into that offer and it will drive your profits up.

3. Churn and burn growth model

The churn and burn growth model is when the small business owners is overly focused on generating new sales at the expense of retaining clients they’ve already attracted. Retention is the single most profitable “growth” strategy yet it is the least used. If you are churning through new sales but have no idea how long your most profitable customer stays with you, chances are you are suffering from this profit leak.

Profit Explosion Solution: Start focusing on the 3 R’s: Retention, repeat business and referrals. The clients who have already invested in your offerings already know, like and trust you. Focus on making them happy and you’ll increase profits like crazy.

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