Want to know what the key to scaling your business with confidence is? Many online…
Want to know 4 ways to increase revenue in your business? For most businesses, revenue growth is an ongoing goal. Whether you are looking to grow revenue Month-over-Month, Quarter-over-Quarter or Year-on-Year if you have the desire to generate more revenue in your business then you are in the right place. Keep on reading to find out 4 ways to increase revenue in your business.
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4 WAYS TO INCREASE REVENUE IN YOUR BUSINESS
1. Raise your prices
One way to increase revenue is by raising your prices. If you raised all of your prices by 25% and sold exactly the same volume you’d have a 25% increase in revenue.
This can be a very easy way to increase revenue. If people only know your prices based on the prices on your website, or what you send in a proposal then you could make this change very quickly. But if you’ve got your prices published in multiple places then you’ll need to ensure you update the information everywhere.
Another thing to consider is what happens to your current clients. This is especially important if you are providing a service that is billed for monthly. In that scenario, you’ll have to consider whether you grandfather your current clients, which means they will keep their existing rate for as long as they continue with you, or you’ll give them a period of notice about the increase.
Whilst this is an easy way to increase revenue a lot of business owners worry that by raising their prices they’ll make less sales. And that is a possibility. But the increase in price means you can lose a certain percentage of clients and still make more revenue than before.
For example, if you have a one-to-one coaching package that is £2,000 and you decide to increase it by 25% to £2,500. On the original pricing, 10 clients would equal £20,000. On the new pricing, 8 clients would equal £20,000 and 9 clients would equal £22,500.
A 25% price increase will mean that a 20% reduction in clients will not impact your total revenue. Now obviously the aim isn’t to be in the same financial position but to increase revenue. So as long as you can increase a 25% increase in price doesn’t end up with you making a 20% or more reduction in sales you’ll be in a positive revenue position.
Read more about raising your prices as a coach or consultant.
Sell more of your current services and products (at the same price)
If you don’t want to increase your prices the other obvious option is to focus on increasing the volume of sales. Revenue is a pretty simple formula
Revenue = volume of sales x price per sale
If your business has the physical capacity because you are selling something where you aren’t physically limited (digital product, membership etc) or you still have capacity available then there is nothing wrong with just focusing on increasing the volume of sales.
That will mean you need to focus on optimising two things – marketing and sales. There are so many possible ways to market your business that I can’t go into depth in this blog post, but I’ve got lots of blog posts about marketing (click here to check them out). But what you will need to get clear about is whether you intend to increase the volume by selling to the same market or you’ll expand and try and sell in new markets.
You might currently feel that there is potential with your target market to increase sales. You might feel as if the industry isn’t saturated and there is plenty of potential. Or you might decide that you want to branch out into new markets.
For example, you could be a financial coach who has been targeting small business owners who take home £100k+ per annum. However, you realise that the help you provide will work for anyone who is earning £100k+ per annum so you decide to add in the new market of employees who earn £100k+ per year.
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Setting revenue growth goals and achieving them are two different things. Being able to successfully market and sell is key! Since 2019 I’ve been running Strategy Days with small business owners to help them do just that. I take their business growth goals and then create a bespoke business growth and marketing strategy. I know time is tight when you are a business owner so I’ve refined the process to take just one day. One day together and you’ll end up for a plan for the whole year! For more information and to book click here.
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3. Run a sales promotion (aka discount your prices)
Another way to increase revenue is to run a sales promotion or offer a discount. As discussed earlier if you increase your prices you may see a reduction in your sales volume. Due to the way supply and demand work the opposite is true. A reduction in your pricing can result in an increase in demand.
Many business owners believe that if they dropped their prices there would be a rush of interest, but many services, especially once you are offering high-ticket coaching or consulting services, are fairly inelastic, which means just because you make a reduction in your price people aren’t going to be rushing to work with you.
So that can mean you reduce your price but don’t get the increase in sales volume necessary to make the overall revenue figure higher.
For example, if you do the reverse of the last example. You take your one-to-one coaching package that is £2,000 and decide to run a special offer where people get 25% off. So your £2,000 coaching package becomes £1,500.
On the original pricing, 10 clients would equal £20,000. On the new discounted pricing you’d need at least 14 clients to see an increase in revenue. A 25% discount requires a 33% increase in sales to make the same revenue.
If you are confident that the reduction in price will result in a significant increase in demand then go for it. However, there are other dangers of discounting your services that shouldn’t be taken lightly. Find out more about these dangers in ‘The dangers of discounting your services’ .
4. Create additional revenue streams
If right now you are selling a limited number of services then one way to increase revenue is to look by adding in additional revenue streams to your business. You could do this by creating a new service or product, or become an affiliate for other businesses.
Creating a new service or product can help not only with increasing revenue but other business goals. For example, you might be stressed by the irregularity in your business income and decide to create a membership that pays on a monthly basis so you have monthly recurring revenue (MRR). Or you might dream of scaling your business and making passive income so you decide to create a digital course that you can create once and then sell over and over again.
One reason why deciding to create a new services or product can be especially effective for increasing revenue is because you can create something specifically to sell to your current or previous clients. It is fair easier to sell to someone who has already bought from your business than someone who has never bought before. But some businesses doesn’t have the range of services and products available to maximise how many times on client can buy from them. If you are considering creating an additional service or product have a good look at your current offer suite and see if there is a natural journey for one of your existing services or products onto the new one. You can learn more about creating an offer suite here.
If you don’t want to create anything new then affiliate marketing could be a great option. This is especially true if you are already recommending products and services in your business. For example, as someone who supports small business owners I’m always making recommendations about website software, social media schedulers, podcast hosts, email marketing tools, content creation equipment and the list goes on. So I became an affiliate for my favourites and have them all on my resources page.
That’s it. You now know 4 ways to increase revenue in your business.
As a business owner, you might decide to focus on increasing revenue by using one of the ways mentioned above or combining a few. For example, you might raise your prices and create an additional service that you can sell to previous clients. Or you might decide to focus on selling more at your current prices, but also become an affiliate for a few other businesses.
There is no right or wrong answer. It is up to you as a business owner to look at the options and with your future business goals decide what is best for your business.
I hope reading this blog post has helped you to feel more confident about being able to increase revenue in your business.
Let me know in the comments what your biggest takeaway is.
| Book a 2024 Strategy Day to map out HOW to achieve your 2024 revenue, and other business, goals.
Setting your business goals is just the beginning. Once you are clear on WHAT you want to achieve you need to work out HOW to achieve them. Over the last 5 years I’ve developed a process to allow small business owners to put together their business and marketing strategy together in just one day. So if right now you don’t have a strategy in place for 2024 and you’d like to be guided through reviewing 2023, setting your goals for 2024 and then having the right business growth and marketing strategy in place to get there – book a 2024 Strategy Day. For more information and to book a 2024 Strategy Day click here.
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