Tea with the Queen

Three ways to increase the profit in your business



Today, I want to share three ways to increase the profit of your business. Whether you’re a seasoned entrepreneur or just starting out, these tips can help you maximise your revenue and improve your bottom line.

 1. Dive Deep into Your Numbers
The first step to boosting your profitability is a thorough analysis of your numbers. It might sound really simple, or even silly but I see way too many women burying their heads in the sand because they lack confidence or financial literacy.

 A book I highly recommend for this is “Profit First” by Mike Michalowicz.  It has a great approach to managing business finances, but the seven bank accounts it recommends might be overwhelming. Instead, I found a balance with just three: 

1. Operating Expenses: Daily business expenses.

2. Tax Account: For taxes owed to the government.

3. Profit Account: A dedicated account where you move a small percentage of your revenue.

By gradually increasing the percentage you allocate to your profit account, you can watch your savings grow. This habit will consistently remind you of the importance of keeping an eye on your profit margins.

2. Increase Your Prices
Another simple often neglected strategy for increasing profit is to raise your prices. Women, in particular, tend to undervalue their services and hesitate to charge what they’re worth. If inflation and business costs rise, so too should your prices. Regularly reviewing and adjusting your prices to reflect the market conditions and the value you provide is crucial.

If you don’t know how to go about setting a price for your offer, then consider using value-based pricing. This means charging based on the value you provide rather than just adding a margin to the cost. Alan Weiss’s book, *Value-Based Fees*, offers great insights into this approach. By focusing on the value rather than just the cost, you can command higher prices and, therefore, greater profit margins.

3. Create New Offers

 Introducing new, high-margin offers is another effective way to increase profit. This doesn’t mean pushing out offers with no margin—instead, focus on those with good revenue and strong profit potential.

 Experiment with different offers to see what resonates with your audience. Test and learn—keep what works and discard what doesn’t. This strategy not only boosts profit but also brings in new customers and opportunities. For example, we developed our Revenue Raiser Program using this method, and it has significantly contributed to our success.

Bonus Tip: Optimise!
As your business grows, it’s crucial to regularly optimise procedures, tools, and technologies. Here are two key areas to focus on:

1. Streamlining Processes: Identify and eliminate bottlenecks in your workflow. Tools and software to automate repetitive tasks can save you time and money. For instance, I detest administrative tasks, but seeking help from experts like business managers or consultants can help set up efficient workflows.

2. Negotiating with Suppliers: It’s important to regularly review and renegotiate contracts with suppliers to get better rates or terms. However, sometimes paying full price is worth it for better service quality. Evaluate each expense to decide whether negotiation is beneficial.

Remember, increasing profit isn’t just about making more money; it’s about valuing yourself and your business enough to make the necessary changes. Happy optimising and let me know how these strategies work for you. I’d love to hear about your experiences and successes!



For a copy of Emma’s book, ‘Go-getter: Raise your mojo, shift your mindset and thrive’ – https://www.emmamcqueen.com.au/book/

Read The Full Transcript

[00:00:00] Emma: Today, I thought I'd talk to you about three ways to increase the profit in your business. How does that sound? Feel free to double speed me if you think really quickly. Uh, the first way is to look at your numbers. I know I cheated a little bit there. I am going to give you some tips, but first, what I want to say is you need to do a deep dive into your numbers.
[00:00:20] You need to fall in love with your numbers. And. Revenue, that is the money that comes in from the top line. So that's the amount of money that you bring into the business. But profit is the money you keep at the end of the day. Once your expenses are paid, once your salary's paid, once everything is paid.
[00:00:35] And it sounds silly and yet so simple, but I see too many women, especially women. Bearing their heads in the sand. I get it. And I don't get it. And one of the books that I love, I thought I would share with you. So one of the books that I love around this is called a Prophet First. Uh, and it's by Mike Mikul, Mikulawoski, Mikul, anyway.
[00:01:05] Mike profit first. I love the book so much. What I don't love about the book is they say to set up seven bank accounts. My tiny mind just can't cope with that. But I did set up three bank accounts. They are my daily expenses or my operating expenses, my GST, tax, anything that I owe the ATO,
[00:01:26] and then a profit account.
[00:01:28] And when I first started my business, I moved a small percentage, very small percentage every week into the profit account and just watch it grow. grow, I should say. And as more revenue came in, I upped the percentage that I would move into the profit account. I hear women, especially on socials say they've made a million bucks, but how much did they actually get to keep?
[00:01:52] You can have a great launch. And make a million dollars. But if you spent a million dollars to get the million dollars, I'm not sure there's much profit there. [00:02:00] Profit to me is a measure of success. Just my opinion. All right. Three ways to increase your profit. That was one, but that was a sneaky one. So I might give you a bonus one at the end.
[00:02:11] I will call this number two. Putting your prices up. Please put your price up. Women generally are not charging enough money. The amount of conversations I have with them about raising their prices to increase their profit in business. This is not just about money. This is about valuing yourself enough and knowing you are worthy of charging the prices that you do.
[00:02:37] That's it, right? If you've been in business for more than a couple of years and never put your prices up. Lady, let's do it. We have inflation. We have costs are increasing. That also means business costs are increasing. Please put your prices up. If you're watching this, feeling my pain, I've got a question for you.
[00:02:58] Type in the comments or reply to us. Just tell us when was the last time you put your prices up? Have you looked at this lately and how did it go? I'm super, super curious. Now, pricing. It's a tricky one. If I had a dollar for every person that asked me what they should charge, I would be one very rich lady.
[00:03:18] In fact, I see a lot of people on Facebook groups asking what they should charge and going into groups, and that's just messing with other people's money mindsets. Unfortunately, it's not a one size fits all necessarily, but there are a couple of things to consider.
[00:03:36] What I like to call Value based pricing. Now I did not make that term up by the way. I just really like it. It's charging based on the value you provide to customers or to clients rather than just the cost plus pricing model. This allows you to increase your prices if you're providing significant value.
[00:03:57] There's a great book on this. Alan [00:04:00] Weiss, W E I S S wrote a Ripper book on this. It's called Value Based Fees. But hold on to your heart if you haven't been charging very much because he will push you to your limits. The other strategy you could do is a discount strategy.
[00:04:15] So using strategic discounts to drive volume without eroding your profit margins. So for example, think about bundling some offers together or a loyalty program of some sort.
[00:04:29] The other thing that you've already talked about, but I think it's so significant that I'm going to say it again, regularly reviewing your prices. Making sure every six months, every year, whatever it is, you review and adjust your prices based on market conditions. It might be based on competitor pricing.
[00:04:47] this one is the easiest way to increase that profit margin, right? I had a client who worked tirelessly for her clients. She always goes above and beyond. Nothing is too much trouble. Her clients tell her to put her prices up. Her clients ask for extra invoices. And yet she has not managed to put her prices up yet.
[00:05:09] There's always a reason for her to not increase her prices. But I suspect when she finally does, Wow. I'll be like, woohoo. When she finally does, she'll regret not having done it sooner. Another way to increase your revenue and also your profit is to throw out some new offers. So I don't mean just pop out an offer.
[00:05:33] That has no margin in it, popping out an offer that has good revenue, but also good profit in it. for me, because we cap our one on one clients each year, normally it needs to be a group thing. And I'm always creating new offers that speak to different audiences and also, , brings new people into my world, which I love.
[00:05:52] I create an offer a few times a year. I test and learn, test and learn, and I ditch what doesn't work and I keep what does. [00:06:00] That is how our revenue raiser program came about. All right. I'll give you a bonus because the first one was diving into your numbers versus anything else. I would call this project Optimize.
[00:06:13] It might sound boring. Anyway, I have been in business for seven years this year and what I needed in my first year in terms of tools and technology and apps and all the kind of stuff is really different to what I need seven years later. And by the way, don't even get me started on subscriptions. There are so many that are necessary and so many you get, and then you forget about.
[00:06:36] if you had a look at your subscriptions, you would see that you're wasting so much money. So have a look at those. That's my little tip for you. But this year we decided to optimize what we already had. And that means looking for efficiencies in everything that we do and optimizing what we can.
[00:06:51] And for us, this looks like something really specific. Two things, actually. One, streamlining processes. So identifying and eliminating bottlenecks in your workflow. For me, it's admin. Admin makes my eyes glaze over. Poor Poor Serena, who's my business manager, she had me looking at something the other day, within five minutes.
[00:07:12] She's like, you're bored, aren't you? I'm like, I'm so bored. This is why I do not do this. So it's about. Playing to your strengths, first of all, and knowing that these things bore you, but sometimes they are necessary and using tools and software to automate all the repetitive tasks and processes. And I'm not tech o, let me say that up front.
[00:07:31] so I had to go to someone, the amazing Katie Gray, to help me work out my workflows, to help me work out how to automate my workflows and to put things in place that were going to help me. so that is a big piece of work, by the way, that is takes all year, basically.
[00:07:44] And then the second thing we're doing is negotiating with suppliers. Now, regularly reviewing and renegotiating your contracts with suppliers to get better rates or deals or terms. But for us, this is especially important when we run the amount of events that we run. So we run [00:08:00] a lot of face to face events here in Melbourne, and they can be super expensive to run.
[00:08:04] I want to put a caveat on this and say to you that sometimes I would rather pay full price and get the best experience for my clients than skimp on the cost. So there is that as well. Sometimes things are totally worth paying full price for, and you just need to know what those things are. But there are some things that we know don't matter quite so much that we could actually get a better deal on.
[00:08:29] And so Do you don't ask? You don't get. The worst they can say is no. But looking at those relationships and working out, am I happy with the relationship? Am I happy with the value for money? Great. You leave it. Is there something else we need to tweak? So Where in your business can you look to increase profit? Is it about reviewing your prices? Please send me a dm. I wanna hear about that. Is it about creating a new offer that is scalable? Is it about optimizing what you have? We would love to know what you do around increasing profit in business. Let us know how you go.