How to Increase Profit Margins: 30 Experts Reveal the #1 Way Small Business Owners Can Improve Profits

How to Increase Profit Margins
Reading Time: 24 minutes

Every business wants to make a profit, and in order to withstand the test of time, a healthy profit is a necessity. But what’s the best way to increase your profit margins and boost your company’s bottom line? Is the secret cutting back on expenses or raising prices? Maybe you should cut back on inventory or renegotiate supplier fees, or perhaps your company needs to amp-up its marketing plan.

The bottom line (pun intended) is that there’s no single best way to increase profit margins. That’s why if you ask 30 different experts for their best-kept secret to increasing profit margins, you might get 30 different answers. To find out what strategies and tactics today’s successful business owners and experts are using to cultivate a healthier bottom line, Direct Capital asked a panel of small business experts and thought leaders to answer the following question:

“What’s the single best way for small business owners to increase their profit margins?”

Whether it’s finding the right balance between capacity and profits, implementing an innovative pricing strategy, or expanding your target markets, we’re sure you’ll find at least one tactic among the expert responses below that you can implement when your company’s bottom line needs a boost.

Here’s what our experts had to say:

Meet Our Panel of Small Business Experts:


Mick Hawes Small business expert for saving profitsMick Hawes

Mick Hawes is CEO and co-founder of UncoverHiddenProfits (UHP). UHP is designed to help small business owners find profits that are largely untapped in nearly every small business.

The #1 way for small business owners to increase their profit margins is: 

Increase prices, but keep in mind the consequences.

Of course, there are the standard garden variety ways to increase margins, such as cost-cutting and increasing sales. But these often lead to increasing stress and negativity within the team as they lose resources and deal with increased pressure from new sales targets.

The simplest way to increase profits is to increase prices. Seems simple, but there are plenty of roadblocks, mostly emotional, to implementing this simple strategy. The limiting factor to the price point for any products or services from a small business is almost always in the mind of the business owner. There is always a resistance to increase prices because of the belief that everyone shops on price. Statistically, less than 20 percent of people shop on price, meaning the majority of consumers make buying decisions based on value.

In the absence of value, meaning two identical products or services, everyone makes a decision based on price. But when there is a perceived difference in value between two products or services, more often than not the decision is made based on the value. I’m not suggesting that you simply put up prices. The key to this is re-releasing existing products and services with added value and then offering them to the marketplace. As an example, a restaurant wouldn’t simply put up prices. Instead, it would introduce a new menu with added value and increased prices.

This can be done in any business. It’s simply a matter of questioning and listening to your customers to understand their frustrations, wants, and desires. Gather this feedback and incorporate it into improvements and refinements to your business’ products and services, along with, of course, an updated pricing structure.

Then stand back and watch what happens. In the majority of cases, profits simply improve. Very rarely are there complaints or lost customers. And generally when a customer is lost, they were a B- or C-class client anyway. Yes, there are many ways to increase profitability in a small business, but most are complex and often ineffective. Start with the basics: add value and increase prices.


GlennCipollaGlenn Cipolla

Glenn Cipolla is the VP of technology for INTAP LLC, a digital advertising space specifically focused on the luxury brand gaming segment. One of Cipolla’s key responsibilities at INTAP LLC is to maintain the company’s relationships with IT providers.

I think the best way for small business owners to increase their profit margins is…

Reduce IT cost.

For example, my former company had an entire building of 100 IT engineers tasked with maintaining its primary application. The total yearly cost to maintain this team was into the millions. In contrast, my current company outsources almost all of our IT. We leverage Cloud computing via several cloud providers. This includes SaaS and IaaS offerings. The result is that we have as much processing power as my former company, more bandwidth, a higher level of redundancy, and the same 24 x 7 operational control and, get this: higher up-time. We have all of this for a fraction (about 10%) of the cost that my former company spends on its IT. Our profit margins are far lower as a result and other companies simply cannot compete with us because of this.


Screen Shot 2015-06-24 at 2.11.44 PMRyan Hulland

Ryan Hulland is Vice President and part owner of MonMan, a small business that specializes in small- to mid-sized business marketing, growth, and market entry. Hulland has been quoted on websites such as Tech Cocktail, Examiner, and Tech Pro, among others, usually about technology and small business topics.

I think the best way for small business owners to increase their profit margins would be… 

Think long term approaches.

Of course the easy answer, according to economics and your friendly MBA course, will tell you to cut expenses. It’s sound advice. Cutting expenses will instantly increase profit margins. In the best case scenario, this is but a short-term solution. But the next question you have to answer is: Which expenses should be cut? My advice, for a short-term boost in profit margins, is to cut tech spending. Maybe dial back your businesses’ cell phone data plan limit. Check to see if you really need to pay for five phone lines at your office. Can you switch to VoIP instead of traditional land lines? Do you still have a fax machine that is collecting dust? Are you spending $300 or more on new cell phones for each employee? Cut that spending back! Are you buying employees top-of-the-line laptops? How about a more value-priced option?

Do you use any subscription-based apps like a CRM, ERP, or file-sharing program? Cut back on the number of users or the storage limit, and you’ll instantly save money. I make all of these suggestions because it results in immediate savings while cutting out some bloat that most businesses have. And if you do it right, the changes won’t even be noticed. That extra 100GB of shared storage space won’t even be missed! Now, I have to tell you. I am NOT a big fan of short-term approaches. In my opinion, if you are looking for a quick fix to achieve profitability, you are working for the wrong company! Sometimes, you have to call it like you see it, and if the only way to “save” a company is to gut a major chunk of it, that company may be too far gone to be saved.

So, next, I would look at the long term. What is the best way to get a company’s profit margin up in the long term? I’m thinking no less than a year. Again, there is no magic bullet, and you have to take it on a case-by-case basis. In general, you need to take a really hard look at your company and the market, and you need to figure out a way to become unique. To borrow a phrase from the ever-wise Seth Godin, you need to find your own “purple cow”. Again, as with the short-term fixes, if you can’t figure out a way to be different, be unique, and be a market leader, you’re going to remain an average company and slow, average companies fail in today’s economy. Harsh, but true. In today’s market, you have to be the best, the fastest, and the most unique. It might be the smallest of niches, but you have to be the best at something. If you can think of a niche where your company could be the best, and you could at least get part way there in a year, then you just discovered your long-term profitability strategy.

Finally, as I suggested earlier, I would not accept cutting employees or a mass layoff as a solution. If the situation is that bad, and you are that desperate to turn a profit that you have to fire the very people who make your business what it is, you’ll be left with a business that is a shell of its former self. I had a very wise and experienced manager tell me long ago that the absolute last thing you should ever cut is the payroll. Spend more on R&D, spend more on marketing, skip automatic raises for a year, make the executives take a temporary pay cut, or implement some other cost-cutting measure. But do not, under any circumstances, cut your workforce! I know there are people who will argue with me, and that’s fine. I’m sure there’re lots of big names with fancy MBA degrees that will say that “a strategic right-sizing of the current workforce is exactly what this firm needs to turn around.” To that, I say hogwash! That’s no way to build a fast, agile, and unique market leader! That’s the fastest way to become a dinosaur. We saw way too many of those dinosaurs in 2007-2008, and smart business people learned their lesson.


Michael Bremmer SME expertMichael Bremmer

Michael Bremmer, CEO of Telecomquotes.com, has specialized in telecom/tech for more than twenty years.

I think the best way for small business owners to immediately increase their profit margins is…

To regularly review your client list to determine several things:

1. Who is making you the most money right now?

2. Who has the most growth potential? Create a written plan for each of those clients and work it like a rented mule!

3. Who isn’t making you money or doesn’t have growth potential? Typically, these are your biggest time crushes, complainers, and late payers. Cut them loose NOW, even if you have to lose money to do it. Your ulcer will thank you.

Our company focuses all its efforts on our top 50, who also happen to comprise 74 percent of our net profit and have the most growth potential. It’s helped us to have two record years in a row, while at the same time eliminating some horrid people from our lives.


Diana SantaguidaDiana Santaguida

Diana Santaguida is co-founder and creative director of SEOcial, a metrics-driven search marketing agency serving as special forces to marketing decision makers who want to get ahead digitally.

I think the best way for small business owners to increase their profit margins would be…

Realizing that margins are fluid.

Small business owners often fail to realize that margins are fluid. Many businesses focus heavily on increasing income and forget that expenses are also fluid. Sometimes the most effective way to improve your profit margins is to decrease your expenditures. This can be achieved through improving process efficiency, leveraging emerging technologies, or negotiating better rates when possible. I try to find one change each month that can save my organization money. Don’t ignore the forgotten metric that matters; decreasing expenditures can really pay off.


Harry E. Keller

Harry Keller

Harry E. Keller, PhD is the President, Chief Science Officer, and Founder of Smart Science Education Inc.

I think the best way for small business owners to increase their profit margins would be…

There really is no single best way to increase profit margins because small businesses are so diverse. One may reduce inventory, while another doesn’t even save inventory. Some may find ways to reduce supplier costs, but some others don’t have suppliers. Some can offshore aspects of their business, e.g. support, manufacturing, or coding, but many don’t have this option either. Think about restaurants. It’s too obvious that you can increase profit margins by increasing prices or decreasing costs, which divide into fixed and variable costs. The best way for one business is not the best for another. Therefore, the only sane answer to the question is a means that will work across the broad spectrum of small businesses.

I’d love to advise reducing costs, but that’s way too general, and, as hinted at above, no single cost-reduction strategy is likely to work for every small business. That leaves raising prices, but many businesses work in extremely competitive environments. Your task, if you’re a small business owner like me, is to find ways to redefine some or all of your products and services as premium and charge accordingly. Why should your competitors be setting your prices for you?

The increase in price might reduce your volume, resulting in fixed costs being a greater percentage of your price and reducing your margins. Avoiding this problem may mean a greater price increase than you were considering and more money spent on rebranding your premium products and services as being better in some way. In a restaurant, it could mean completely changing the interior and cleaning up the exterior, followed by a strong community outreach. In an SaaS operation, it can mean becoming more responsive or having a wider range of capabilities. Generally, these things require an upfront investment that you then amortize and figure into your analysis. Don’t forget to include any increased cost of customer acquisition as you decide on your new pricing.

Just because this is the single best way to improve profit margins for small businesses does not mean that you should ignore your costs. Never stop looking at your expense reports and seeking ways to reduce those numbers without harming your business.


Amad EbrahimiAmad Ebrahimi

Amad Ebrahimi is the Founder/Writer at Merchant Maverick.

I think the best way for small business owners to increase their profit margins is…

Renegotiate terms and rates with current vendors or referral partners.

If you own a product-based business, then approach your vendors and ask for wholesale discounts. If you’re a valuable source of revenue to them, they’ll work with you.

In my own business, we refer a lot of customers to other companies, so what we like to do is renegotiate our referral fees based on how well we’re performing. Our partners obviously appreciate our business and are happy to pay us more, especially since we can reinvest that capital into increasing revenue for everyone. This tactic obviously won’t work with some small businesses, particularly service-based, but the guiding principle here is that sometimes it’s best to get more out of what you already have.


Katie Everds Katie Everds

Katie Everds grew up in San Diego, California, then moved to Los Angeles in 2007 where she attended UCLA. She received a Bachelor’s degree in Psychology but always had the itch of entrepreneurship. Upon graduation, she started her career in marketing while developing her first product, the Tillow, at age 24. Katie, Founder and CEO of Everds Investments LLC, strives to develop and market innovative products.

I think the best way for small business owners to increase their profit margins is…

Find that near-perfect manufacturing partnership.

It is worth it to put in the time and ask the correct questions off the bat. Your margins may seem great, but if the manufacturer cannot produce large quantities in a timely manner, you may lose out on larger deals because you are unable to deliver. Never opt for a lower-quality product to cut costs, because your customers will know the difference and you will lose more business than any money saved in the process.

My advice is to take the time to find a trustworthy and efficient manufacturer. Go out and source materials yourself. Get as many quotes as possible to learn the average costs for materials and strive for the lower end. Never compromise quality and always took for ways to enhance your product with limited changes in materials. This way, you will retain customer loyalty and quality control!


KendallJonathan Kendall

A global advisor, keynote speaker, and selling and business coach, Jonathan teaches organizations and individuals how to use and expand their skills to best develop their organizations. His professional experience in technology and business from the USA to Latin America came from his synergetic love for all things technological, entrepreneurial, and commercial. Always focused on success by building on each individual’s potential, Jonathan’s career has enabled him to create massive value and help others build and expand on their success.

I think the best way for small business owners to increase their profit margins is…

One word: sales!

The biggest problem we see every day with small businesses that stay small and marginally profitable is that they lack a solid sales pipeline. Businesses are not facing the fact that there are clear generational differences in successful sales by, and to, the three primary generations as buyers, users, and managers. A well-trained sales team that is sensitive on how best to reach and convince the buyers of the value of their product or service will create an improved revenue stream and enhance profits.

Millennials, Gen’X’ers, and Baby Boomers are unique and, many times, at odds because they cannot understand or value the uniqueness of the age group’s view of life, happiness, and values. A well-run, profitable company understands this and delivers the corporate message in a way that connects to everyone and makes the profits roll in.


JulienBouyssouJulien Bouyssou

Julien is the co-founder and CEO of BillXperts, a web-based start-up specializing in saving people money on their monthly bills (phone, internet, TV.). Bouyssou has about 10 years of experience as a finance consultant, both in large organizations and small-sized businesses.

I think the single best way for small business owners to increase their profit margins is…

Eliminate waste.

The LEAN concept of identifying waste and eliminating it applies to both large organizations and small start-ups. So as a small business owner, make sure you scrutinize you expenses as if it were your own money and look for opportunities to simplify and standardize your processes.


Brian Carter GroupBrian Carter

Brian Carter is a 15-year digital marketing veteran and popular social media speaker (with clients like NBC, Microsoft, Dramamine, and PrideStaff) who delivers practical takeaways, entertainment, and motivation. His company, Brian Carter Group, is a boutique agency with world-class expertise using digital/social marketing and advertising to boost profits for growth-minded businesses.

I think the single best way for small business owners to increase their profit margins is…

Either 1) lower your customer acquisition costs (we prefer  to do this by making digital marketing, advertising and landing pages more efficient), or 2) increase your price. To do the latter, you need to make sure you’re focused on what makes your offering uniquely more valuable than other options. You can’t do this in a commodity situation. And this is why having a Unique Selling Proposition is so important. The obvious third way is lower your other costs, but these are often fixed.


John RamptonJohn Rampton

Best known as an Entrepreneur and Connector, John Rampton was recently named #3 in the Top 50 Online Influencers in the World by Entrepreneur Magazine, in addition to being recognized as a blogging expert by Forbes. Rampton has also been named among the Top 10 Most Influential PPC Experts in the World for the past three years. Currently, Rampton is the CEO of Due.

I think the single best way for small business owners to increase their profit margins is…

Get more out of your current customers.

These are people who have forked over their credit cards and trusted you. Now it’s time to figure out what they are willing to pay more for. Next, ask them to refer their friends. If they truly love your product, they will refer everyone to your service. The profit margins will keep getting bigger and bigger.


Dave BarnesDave Barnes

Dave Barnes is the founder and CEO of Gym And Fitness, one of Australia’s largest online retailer of fitness supplies and equipment. Barnes was involved in many competitive sports throughout his teens, so he was always in and out of gyms and had an interest in his own fitness. At 18, he tried to set up his own home gym and noticed a major gap in the online market for fitness equipment sales. Thus, Gym and Fitness was born.

I think the single best way for small business owners to increase their profit margins is…

AdWords, without a doubt, is my number one, go-to tool to increase profits.

With AdWords, we can extract actionable insights from all the data we’ve collected. We’ve considered it a great tool for marketing automation since it takes away all of the tiresome effort traditional marketing required before it. Now, all you have to do is prepare your keywords, decide on your budget, and let AdWords reach the searchers that matter the most to your profitable business.


saxmanSnowe Saxman

Master Business Consultant, Wealth Management Expert, and Coach, Snowe Saxman helps women (and some men) break free from limiting beliefs surrounding money so that you can realize your full potential in your business and your life. What makes her unique is that her signature programs also teach you how to manage and multiply money so that you can focus on what you do best!

I think the single best way for small business owners to increase their profit margins is…

Strategic tax planning.

The IRS estimates that we over pay taxes by about $945,000,000. Most of this is due to the fact that people file their taxes themselves. They make mistakes and miss money-saving tax strategies they didn’t know about. Most small business owners do not know the taxes they are liable for, all the deductions they are allowed, or any money-saving tax strategies. A lot of them are using traditional accountants and CPAs; however, most of these professionals only offer record keeping services, not strategic tax planning.


Daniel Brady Profit expertDaniel Brady

Daniel Brady owns Heavenly Hammocks Australia, an e-commerce business. He also owns more than 25 websites not focused in the e-commerce space. Brady has experienced the failure of one e-commerce business, but it was a valuable learning experience that served to make his current business more successful.

I think the single best way for small business owners to increase their profit margins is…

1. Up-selling related accessories with each product. More than 50 percent of our customers add accessories, and every time they do, profit margin jumps from 30 to 40 percent of revenue to more than 50 percent. It’s because the accessories are free to deliver (they’re small and added to the same package) and the advertising is already paid for. The only cost is the accessory itself.

2. Using a courier price comparison tool for each order to minimize delivery cost, such as ShipGooder.com or PostageSupermarket.com. A previous business of mine failed due to high delivery costs because we didn’t use this technique. This newer business is doing far better because of it.

3. Cutting import costs by negotiating and importing higher volumes. We cut our product costs by 35 percent by doing this, all of which went straight to profit. Cutting other expenses where possible, like negotiating better payment processing rates, helps too.


Eric BartonEric Barton

Eric Barton is an author marketing strategist, direct response copywriter, search engine/pay per click specialist and serial entrepreneur who has been featured in places like Entrepreneur Magazine, CBS Money Watch, ABC, and more. He helps small business owners and entrepreneurs at fasteasysuccessmarketing.

I think the single best way for small business owners to increase their profit margins is…

Knowing the math and adjusting the marketing system to make the math work.

With thousands and thousands of niches and hungry customers out there, setting up an automated online business (or even an offline brick-and-mortar business marketing system with back-end offers in place) is the best way to not only take advantage of new customers, but also generate more profits from current customers.

Any business owner or entrepreneur can set up a system or marketing funnel, generate leads, and turn those leads into customers on autopilot-24 hours a day, once they have the right system in place.

We all know business can be a risk, and that’s why it goes back to modeling what works: testing and scaling up backends. A lot of business owners are usually concerned with generating new customers at the lowest cost per acquisition. But when you have backends in place, you can even pay more than your competition to obtain a lead or customer (which will be most likely be of a higher quality) and still generate massive profits.


SullivanMark Sullivan

Mark Sullivan is Director of Analytics for CallRail. He is passionate about arming small business owners and agencies with the right tools to create exceptional sales success in an extremely tough and often fragmented online environment.

I think the single best way for small business owners to increase their profit margins is…

Most small business owners are struggling as it is to run their business, let alone gauge the effectiveness of their marketing investment. While being aware of investments is important, SMBs can easily be fooled by all the new marketing metrics out there. When it comes to marketing efforts, and ultimately increasing profit margin, the best thing for small business owners to know is what counts as a solid lead and how much they’re paying for that lead.

Lead Acquisition Cost, or LAC, is a direct correlation between a business’ marketing efforts and the results of those efforts. Regardless of where they’re advertising, SMBs can still measure a direct return back to their investment. LAC can be easily measured regardless of campaign, be it social media, search marketing, or even a simple print ad.

LAC does not focus on a “click” or a “like”, but an actual customer engaging with the business. Similar to Cost Per Lead (CPL) or Price Per Lead (PPL), LAC is a calculation and qualification of the amount paid for each lead, of any form, that a business receives. Once SMBs gain perspective on their own lead acquisition costs, they can start to eliminate unsuccessful marketing efforts and increase their profit margins.


Aman MannAman Mann

Aman Mann is the co-founder and CEO of Procurify. Behind the title is a man who strives to constantly improve, not just himself, but also those around him.

I think the single best way for small business owners to increase their profit margins is…

To remember that controlling costs is actually more efficient than increasing revenues.

The Gartner Group estimates that a five percent reduction in operating costs can have the same impact as a 30 percent increase in sales. Optimizing operational processes like purchasing can be as simple as implementing e-procurement solutions or other controls to manage how company money is spent. Don’t just give your team credit cards, give them budgets and make them accountable for tracking them and ensuring the purchases are made from the correct suppliers. Maverick spend occurs when staff buy an item needed for their work or for the office in an ad hoc fashion, which typically results in the item being purchased at a premium price rather than from preferred suppliers where deals may already be negotiated. These additional costs can add up quickly.

There is also an issue with the purchasing process itself in many small businesses, where the simple task of requesting, approving, and tracking budgets become a messy time-sink for the entire team. Papers are lost, Excel sheets are difficult to collaborate on and email is not a very effective filing cabinet. Not to mention, it is pretty much impossible to run reports on all this scattered data.

Without the ability to run reports on all of these dispersed actions, process improvements continue to remain elusive. By streamlining and efficiently tracking this process, the time savings can result in huge operational cost savings and a less-stressed workforce. The team can also know ahead of time when they are nearing the limits of their budget – instead of after the fact.


Marc ScheipeMarc Scheipe

Marc Scheipe is the CFO at Sage North America. Scheipe is an accomplished business leader, with more than 20 years of financial services experience focused on financial management, strategy development, process improvement, and sales/operations leadership.

I think the single best way for small business owners to increase their profit margins is…

In most businesses, the most obvious way to improve profit margin is to increase revenue. Since most cost structures include a material amount of fixed costs, increasing revenue will typically add variable costs up to a point where additional capital costs may be needed. It’s very important to understand the cost structure of your business and the drivers of incremental (profitable) revenue.


Sean MallonSean Mallon

Sean Mallon started his first business, which has grown to be one of the biggest traditional business brokers in the country, at the age of 21. As well as buying and selling his own business, Mallon has handled over 1,000 business sales. He has recently launched bizdaq, an online platform which provides business owners with all the tools required to sell their businesses without the costs or commitment required by traditional selling agents.

I think the single best way for small business owners to increase their profit margins is…

Invest in your people. Not only is it the right thing to do, but there is plenty of hard evidence demonstrating that happy employees equate to hefty profits.

Satisfied employees have higher motivation, which leads to better customer service and satisfied customers. All of these factors lead to increased reputation and brand awareness which, in turn, will bring more business to your company, thus increasing your profit margins.

Some small business owners may feel that it is too hard to compete with benefit packages that most larger organizations can afford to offer; however, this really isn’t the case. The trick to ensuring your employees remain engaged and productive is by determining what makes your company unique and pitching it hard.

Small businesses have the advantage of delivering unique benefits which larger businesses could not, so make sure you utilize these. For example, handing out gift cards to local restaurants every once in while or ensuring the kitchen is fully stocked with food and drink demonstrates to employees that you value their work and want them to enjoy their private time. Small businesses can also offer better work-life balance and flexibility than many larger organizations, as the size of the workforce makes this easier to manage.

Creating a collaborative environment also makes employees feel valued, as well as customizing roles and compensation packages to individuals. For example, offering full health benefits straight away is a benefit which small businesses can offer, whereas larger companies tend to make their employees wait 90 days. These are all motivating factors for employees, ultimately increasing their loyalty towards the business.

Making your work place fun is important for employee satisfaction and engagement. It has a direct impact, as encouraging people to bring their personalities and passions to work leads to a seamless work/life balance where people feel that they can really be themselves at work. Fun and games are great stress relievers, too.They keep the workforce refreshed and build real bonds between employees.

Additionally, providing fair pay, development opportunities, and having an approachable management style will all illustrate to employees that you want them to be part of your businesses success, as well as providing them with the opportunity to lead a more balanced life.

Keeping your employees happy is the most effective and sustainable way to ensure your profit margins increase and continue to do so. It’s a continuous cycle, as providing great customer service and creating more business imbues the company with excitement which helps employee retention and motivation. Everyone wants to be part of a winning team.


Jennifer GoldmanJennifer Goldman

Jennifer Goldman is a Certified Financial Planner and founder of My Virtual COO, the leading operations efficiency and implementation expert in the financial RIA community on technology, integrations, processes, and outsourcers. Prior to founding MVCOO, Goldman spent over 20 years in the financial services industry, starting in Quality Control over a large bank mortgage lending division to then building her financial advisory business.

I think the single best way for small business owners to increase their profit margins is…

For service businesses, use your tech to automate and eliminate administrative work, which reduces costs (admin costs, owner’s time managing the admin, cost of desk, lights, computer, etc.). A specific example is using an appointment scheduler to allow people to self-book calls and appointments.


SawhneyJasmeet Sawhney

Jasmeet Sawhney is a serial entrepreneur who has been in digital marketing and social technologies for over 10 years. He has helped both startups and large corporations in their branding, product marketing, and lead generation efforts.

I think the single best way for small business owners to increase their profit margins is…

A 30-20 rate increase.

Every year, we analyze revenue generated from each distinct solution area. The objective is to identify offerings where we can increase our rates by 20 percent without losing the customer. We then select accounts that generate 30 percent of our total revenue across these identified solution offerings. Sometimes, this means that one of our clients may get the same service at a lower cost than the one we identify for rate increase. We have not lost a single customer because of this strategy.


Media Moguls PRBlair Nastasi

Blair Nastasi is the CEO and Founder of Media Moguls PR and Co-Founder of Kickass Business Cruises. She’s been featured on ABC News (three times), Bplans.com, Docurated, and CEO Blog Nation. She’s also the #1 Marketing & Business Columnist on Examiner.com and on the board of directors for three non-profits.

I think the single best way for small business owners to increase their profit margins is…

Immediately begin outsourcing small, time-consuming tasks as well as any areas of the business the business owner and existing team are not well versed in (such as marketing, accounting, etc.).

Time is money, and if a business owner is wasting time creating spreadsheets, fielding unimportant calls, or scheduling social media posts when their expertise and line of business is in something entirely different, money is lost. Stick to what you’re good at, and find someone else to do the rest. Best of all, with a little research, it’s not all that expensive to outsource. Once I started outsourcing my writing, social media, and administrative tasks to other people who were far better at it than I was, my time opened up to focus on what I’m good at, which is PR. I now have the capacity to handle 10 to 15 clients at once, while before I was capped at six or seven. To sum it up, I’m making more money.


Screen Shot 2015-06-24 at 4.36.18 PMMatt DeCoursey

Matt DeCoursey is the President and Founder of GigaBook, a SaaS company that provides cloud-based appointment scheduling and client reminder tools to small and medium sized business.

I think the single best way for small business owners to increase their profit margins is…

Taking advantage of the cloud-based services that are emerging in most industries.

Many of these services offer automation of tasks that are often times redundant. For example, GigaBook.com helps small businesses take appointment requests through their existing websites, automates client and service provider appointment reminders, and can also automatically invoice clients at the completion of services. The cost savings for those services, along with the decrease in no-show appointments through the use of reminders, provides an efficiency that far outweighs the nominal costs of subscriptions for these kinds of services ($25-$50 per month).


Kurt KunselmanKurt Kunselman

Kurt Kunselman, Co-founder of AccountingSuite, is a veteran at helping small businesses grow by utilizing technology with 12+ years of consulting on and selling Accounting/ERP software. Kunselman co-founded cloud-based AccountingSuite to provide easy-to-use, scalable business software for startups, entrepreneurs, and growing companies to manage their finances and day-to-day operations.

I think the single best way for small business owners to increase their profit margins is…

Staying on top of the finances to maximize those profit margins.

Having the right business application that will support and help your business grow is the first step. There are so many options out in the market, from on-premise to the cloud, ranging from applications with only invoicing to full accounting with order management and inventory management. There’s no single solution that will fit all, since every business is unique. After selecting your application and to supercharge your profit margins, ensure your solution is cloud-based so you can easily add an accountant or client accounting service without having to add on a full-time employee or using complicated file management systems. In conclusion, utilizing professionals and proactively managing finances with cloud-based applications will ultimately lead to higher profit margins, no matter what industry you are in.


 

Jason ParksJason Parks

Jason Parks is the owner of The Media Captain, a digital marketing agency based in Columbus. Parks has been quoted in the New York Times, Success Magazine, and Yahoo News. He has assisted in launching successful digital campaigns for publicly traded companies, national brands, and local, family-owned companies that have gained national attention.

I think the single best way for small business owners to increase their profit margins is…

If you are able to get your website to rank well organically on Google, it can drastically increase your profit margin.

Your business will no longer have to invest a large chunk of its advertising budget into pay-per-click advertising if users can find your site organically.

Once you achieve solid search engine ranking positions within your industry, it will generate new business at an extremely low cost per acquisition.


Vito PaganoVito Pagano

Vito Pagano is a credit card and merchant services expert and CEO and Founder of Independent Merchant Group. Before founding Independent Merchant Group, Mr. Pagano was Vice President of Bank of America Merchant Services for the commercial/corporate division.

I think the single best way for small business owners to increase their profit margins is…

Credit card transaction fees have become one of the biggest expenses for small business owners – both brick-and-mortar and online small businesses. Monitoring these expenses is one of the best ways to increase profit margins. Swipe fees from card issuers are the fastest-growing expense for retailers, while card-not-present transactions typically cost the seller more – depending on the volume of transactions, the seller’s line of business, risk factors, and other criteria. So what’s a small business to do since almost all are in a position where they must accept credit cards? Here are a few tips:

  • Review monthly processing statements: Don’t just blindly pay your statement each month. With the levels of fees and surcharges buried in the fine print, it is up to the business owner to stay on top of it. Or, hire an independent auditor who specializes in this for assistance. Sometimes the processing companies are not offering you all the industry discounts and incentives available from Visa or MasterCard.
  • Communicate: Banks and processors often fail at revisiting the growth or changing needs of a small business. Merchants must actively communicate with their bank or processor to avoid erroneous fees and hidden surcharges.
  • Make the right choice: Look for a bank or processor who pays attention to your needs. You should choose the provider that wants to learn more about the needs, future plans, or changes for your business.
  • Reduce transaction fees: Be sure to calculate the percentage of your credit card sales which are going to transaction fees, have an annual review with your processor, and use up-to-date point-of-sale technology. It could greatly reduce your processing costs.


Ben StrackanyBen Strackany

Ben Strackany is an award-winning speaker, author, and tech startup veteran who honed his digital skills with successful VC-funded web pioneers and with retailers such at Target, Best Buy, Home Depot, and others. He is the CEO of DevelopmentNow, a digital innovation agency that provides mobile, web, and hardware solutions to early-stage startups and enterprise firms.

I think the single best way for small business owners to increase their profit margins is…

Cut costs. Depending on your current profit margin, lowering costs by 10 percent can often increase your profits by 50 percent or more. Review your monthly expenses, consolidate or outsource staff positions, replace or negotiate with vendors, and invest in automation or other cost-lowering technology.


Bob BentzBob Bentz

Bob Bentz is president of Purplegator, a mobile marketing agency located in suburban Philadelphia.

I think the single best way for small business owners to increase their profit margins is…

Stop advertising in traditional media and consider a mobile and digital advertising approach. We’ve moved so many of our clients away from radio and print and into geo-targeted mobile advertising. Mobile isn’t getting its fair share (24% of time spent with media, but only 8% of ad dollars) right now so there are real bargains available. And, for small businesses with a limited trading area, you can geo-target your advertising so that there’s no waste.


 

J. Michael CavittJ. Michael Cavitt

J. Michael Cavitt is a Connector at Cavitt Associates LLC. The company uses the proprietary The Order of Business™, Systems for Strengthening Relationships™, and The Ripples Model™ to help early stage businesses and startups; as well as established businesses to create a solid plan to identify needs, achieve desired results, and build customer relationships.

I think the single best way for small business owners to increase their profit margins is…

To clearly ask the best prospect to take action at the opportune time. They increase their revenue from people they like to have as customers while not wasting time with those they don’t.

This strategy like many effective strategies is not complicated; however, it requires thought and planning; as well as, the discipline to ASK. Most business owners are not ready to do any and especially not all three of these actions.

About Direct Capital

Direct Capital has been helping small businesses access the capital they need since 1993. In our 22 years, we’ve helped over 70,000 small businesses and we aren’t stopping there. In fact, we like to think we’re just getting started. With the August acquisition by CIT, our equipment financing and small business loan products have never been better or easier to obtain. For more information on who we are, what we do, and how we can help your business grow, visit our website!