Every business owner wants to increase profit, but there’s no magic shortcut. Increasing your company’s profit doesn’t always require more clients, more staff, or more complexity. Often, it’s about fine-tuning the fundamentals: trimming expenses, reviewing prices, and choosing the right type of business.
Here are three areas we recommend increasing profit for your business.
1. Review Your Expenses
The first place most people look is deductions. And for good reason—expenses have a way of creeping in when times are good. Maybe you signed up for a software subscription you no longer use, or you’re still paying for a service that hasn’t delivered value in years.
If you don’t take a hard look every three to six months, costs can quietly bloat and eat into your profit. Ask yourself: Did we actually need this last year? Is this helping us grow? If not, cut it. Every dollar you save here goes straight to your bottom line, helping your business to increase profit over time.
2. Raise Your Prices—Strategically
One of the fastest ways to increase profit for your business is also one of the most overlooked: raising your prices. Too often, business owners avoid price increases out of fear they’ll lose customers.
If you’re hesitant, start small. Test a price increase on a segment of your business and see how the market responds. But don’t let years pass without reviewing your pricing strategy.
For example, a owner of a $10 million company who hadn’t raised prices in three years, fearing they might lose customers. Even a modest 3% annual increase would have added up to roughly $1 million more in revenue over that time—without likely losing that much business.
A small, steady price increase would have added a million dollars to their bottom line—without changing anything else in the business.
More on this topic: Is It Time To Re-Evaluate Your Pricing Structure?
3. Be Strategic About the Business You Take
Not all revenue is created equal. Some projects or services consistently deliver higher margins, while others drain resources for very little return. Focus on the work you excel at—the kind that contributes more profit per dollar earned.
There are also cases where lowering your price strategically can help. If you’re selling a highly competitive, commodity-type product or service, cutting your price slightly could increase volume enough to offset the thinner margin. But the math has to work. Always weigh whether the increased volume actually improves your profit.
More on this topic: Are You Taking the Right Work?
When was the last time you checked your expenses, raised your prices, or reviewed the type of business you’re taking on? Answering these questions with your managerial team may help your business increase profit for months or even years to come.
For personalized guidance, please schedule a consultation appointment with a Principal at Bernstein Financial Services to help you determine your optimal planning strategies.
The information provided in this blog post is for general informational purposes only and is not intended as legal advice. Every business and financial situation is unique, and the strategies discussed may not be applicable to your specific circumstances.