How to Increase the Profitability of Your Service-Based Business

In the service-based business landscape, time is money. You need to find ways to constantly improve efficiency and results if you want to make the right amount of profit. Since there are only so many hours in a day, increasing the amount of time you spend working will only take your business so far.

That’s why many small business owners need to find more creative ways of taking their company’s performance to the next level. If you’re ready to take the next step with your service-based venture, you’ve come to the right place. We’re going to look at some simple ways to increase your profits without any significant investments.

These strategies will work for any service-based company, regardless of whether you’re just getting started or running an established venture and looking to expand your brand.

Keep an Eye on Important Metrics

Talk to any veteran business owner, and they’ll tell you that you can’t improve what you don’t measure. That’s why it’s so important to have the right tools in place for tracking everything.

You need to keep a close eye on your incoming cash and your outgoing expenses. This will give you an insight into where you might be wasting money and opportunities.

Look at how much you’re spending on technology that your employees don’t even use or advertising campaigns that aren’t driving real results. The more you watch the ROI of everything you do, the easier it is to determine which strategies you need to get rid of.

Another bonus of better tracking is that it will also make it easier to see which of your efforts generate the most income. This can lead to better spending optimization, so you’ll know every investment is going to pay off.

Replace Equipment That Eats Resources

The right technology stack makes a considerable difference to modern service-based businesses. If you’ve currently got technology that fails to deliver the right results, or breaks down more often than it should, then it might be time to invest in some replacements.

Getting your hands on more efficient tools might cost more initially, but they will give you the benefit of fewer maintenance issues in the long-run.

While it’s often tempting to try to save money by repairing machinery rather than replacing it, such an approach could actually be costing you more in the long-run. Consider examining the most valuable products that you use in your service-based business to determine the right approach.

For instance, if you’re an accountant using dated software that no longer works as good as you want it to, then it just makes sense to pay for some new, more efficient software.

While the initial expense of replacing equipment and tools can seem difficult to stomach, the long-term return on investment usually makes this move worthwhile. You might even find that you can automate some processes and save more valuable time.

Use an App for Your Business

Especially during the COVID era, mobile apps and online services have proven their effectiveness when it comes to helping a business maintain operations even with numerous restrictions in place.

For instance, if you encourage your customers to use an app that allows your audience to order food before they arrive at your destination, they won’t have to wait for as long to be served, which will improve your reputation and your overall performance.

The app could also make it easier for your customers to see when you’re available for appointments or book interactions online.

The right app solution will enable you to take orders and payments for everything from takeaway to table service.

With a system that takes zero commissions, you get more of your profits and a fully-branded mobile app. An app can also make it easier for you to track orders and purchases while allowing you to determine your company’s busiest times or pinpoint your most popular products.

One of the most important benefits for your customers is the flexibility they need in terms of how and when they interact with you.

You can choose from various payment options, process transactions in an environment that feels comfortable and secure for your customers, and so much more. You can even allow your audience to set up their own membership accounts to log into your system faster in the future.

If your app is a success, you can even use it to launch loyalty schemes that make your customers keep coming back for more.

Optimize Asset Distribution

Just as it’s important to optimize your business by obtaining the right tools and systems, it’s also essential to ensure that your employees can access these solutions properly.

Optimizing asset distribution between your team members reduces the risk of idle times and delays in task completion.

In your service business, every moment counts. Asset distribution will ensure that you’re not wasting any valuable seconds.

Asset management doesn’t have to be overly complicated, either. Service-based businesses from all industries can tap into convenient software to make the process a lot faster and more convenient than it used to be.

For instance, you can set up an automated system that tracks everything from risks of asset theft, to an increase in costs when suppliers change their fees. You can even set your system up to automatically track when you’re about to run out of valuable items that your employees need on a daily basis.

The right solution will enable you to stock up your supplies before your productivity starts to suffer.

The best software will be able to track trends and insights that help to make your business more productive in the long run.

Focus on Customer Retention

Finally, if you want your store or service-based business to be as profitable as possible, keep in mind that you can’t put all your focus on finding new customers.

It’s much easier to keep an existing customer than it is to win a new one. Whether you own a hair salon or an accountancy firm, happy return customers will be the main source of income for your business.

Repeat customers make all the difference between a business that’s valuable and successful and a company that ends up fizzling out as soon as new competition arrives.

Focus on customer retention by offering your clients the best possible experience you could manage.

Make it easy for them to log into their accounts and place orders or arrange bookings. Ensure that you give your most valuable customers the best discounts and deals. You can even boost your chances of success by asking your clients to join a loyalty program.

Happy customers can also be an excellent source of new business, particularly if they’re recommending you to their friends and referring fresh clients your way. Don’t get so focused on trying to find new customers that you forget your existing ones.

Make Your Business More Profitable

It doesn’t take much to build a business these days. Anyone can launch a service-based company with a little creativity and an internet connection.

However, it takes more than this to make your company profitable. Fortunately, the tips above should ensure that you make the most of your new venture. Remember, even if you think your company is already pretty profitable, there’s always room for growth.

Author Bio: Ashley Wilson is a digital nomad and writer for hire, specialized in business and tech topics. In her self-care time, she practices yoga via Youtube. She has been known to reference movies in casual conversation and enjoys trying out new food. You can get in touch with Ashley via Twitter.