Raising prices is just one of several approaches you might take to strengthen your business’s financial position. Taking other measures — both short- and longer-term — could also help you boost revenue and cash flow.
Depending on your type of company, you might consider alternatives such as:
- Bundling products. Consider packaging your offerings in a way that provides additional value at higher profit margins. For example, a home goods store could pair a popular kitchen item with a related, but slower-selling one for a price that nets higher profits compared with selling the two individually.
- Exploring a subscription model. Charging on a recurring basis for your product or service can make revenues more consistent. More types of businesses lend themselves to a subscription model than you might think: Food, clothing, grooming, and even toy retailers sell via this approach. Think carefully about whether it could work for your business, and consider whether different levels of pricing (for example, a lower monthly rate for longer-term subscriptions) is appropriate.
- Encouraging volume purchases. Offering a small discount for purchasing larger quantities of a product or service could help to boost revenue and move inventory more quickly, but take care in how you use this approach. While it may help drive sales of slower-selling items, it could eat into profits on more popular items that might have sold at full price. Instead of discounting bulk purchases of those products, consider stocking them in place of slower-moving items.
- Providing off-season price breaks. If your business is seasonal, consider offering discounts to boost revenue and drive demand during typically slower times. A post-season sale is one way to do this: A ski shop, for instance, might sell its products at a discount after their season ends to clear out inventory. Other businesses might lower prices to lock in future revenue, such as a landscaping service that offers a 5-10% price break for customers who book spring services in the winter.
- Tightening operations. Process improvements often flow to the bottom line, so look for opportunities to increase efficiency. While specific improvements to consider will depend on your business, they may include:
- Aligning scheduling with demand. Be sure to schedule employees according to need. Analyzing sales patterns can help you make any needed adjustments.
- Ensuring that time is adequately compensated. For service-oriented businesses, check that billable activities are accurately captured and that your fees align with time spent on the work.
- Billing and following up on late payments promptly. This habit can help speed up receivables and reduce errors that can come with billing delays.
A good banking partner can also help your business maintain sound financial health by offering tools and advice that streamline processes and improve efficiency. Learn more about how Citizens Bank can help your business thrive, or visit your nearest branch.