How to Increase Sales in Small Business
You can easily increase sales by following the following tips.
Every business craves to increase sales figure. They want to record a higher sales figure than the previous year irrespective of the scale at which they operate. A million dollars business wants to achieve multimillion dollars; multimillion business wants want to enter into its billion, billion dollars business wants to become multibillion and so on. No one wants to remain at the same spot.
But how can a business move from one level to the other? In another word, how can a small business increase sales? One of the means of determining the size of a business is by simply look into its turnover. No company can claim to be big if its turnover is small. Companies usually adopt many different approaches and strategies in order to increase sales. No matter the approach you adopt, the way to increase sales figure is by simply focusing on two variables that make up your sales. They are price and quantity. Mathematically, sales is arrived at as follows:
Sales = Price x Quantity
For example, if you sell an article at he rate of $10/item and you are able to sell 1,000 units, your total sales is computed below:
Sales = $10 x 1,000
= $10,000.00
Supposing you desire to increase sales by doubling your sales. That is, you want to increase sales figure to $20,000.00; you can only play with your variables, which are selling price and the number of quantity you sell. You can take any of the following steps to increase sales but each step does not guarantee the same level of profitability at the end of the day. We shall discuss much about this later.
- Increase your price to $20/item and still sell the same quantity.
- Sell at $10/item and sell 2,000 units.
- A change in price and quantity.
Increase selling Price
In a perfect market, customers have access to all necessary information about the products they want to buy and the products are widely readily available from various suppliers. It will be difficult for a seller to arbitrarily increase the prices of his products. Otherwise, he is sure of losing his customers to competitors. But in a situation where you can differentiate your products either by way of real or perceived quality, then you can leverage on this to increase your selling price. This means that customers are paying for the premium of additional quality or benefits they derive from using your products. The danger in increasing product price is that the customers might not be willing to buy at your new price most especially when there are close substitutes to your product. This can drive down the total revenue. Therefore, there is need for caution so that customers do not react negatively to your product price.
Read Also: Ways to Grow your Small Business
Maintain the Current Price
It is possible to increase sales by still selling at your current product’s price. This means that you are focusing only on how to increase the quantity of the product you sell. To achieve this, there may be a need to engage in promotion and advertising to drive the sales. It could even mean expanding to cover new locations. But before embarking on expansion, it is good that you do some findings about such factors that may likely hinder your sales there. Have a strategy you can possibly put in place to circumvent the situations. You find out about buying potential of the people in the environment, the number and size of your competitors etc. Please note that that the fact that you increase sales does not mean a corresponding increase in your net profits. The costs of promotion and advertising of your product and other incidental costs will definitely have effect on the bottom line.
Change Price and Increase Quantity Sold
You can have a mix of change in price and quantity sold in order to incraese sales. That is, you can increase your selling price marginally and do some marketing efforts to promote your products to new customers.
If you find it difficult to increase sales using above methods, you may consider adding other products or services to your offerings. By this, you will be able to sell more to the same customers without spending on marketing. This will help you increase sales figures.
Read Also: How to Increase Sales Without Extra Marketing Costs