Find the Hidden Profits in Your Business

Your small business probably needs all the revenue it can generate and, as a result, you may spend a great deal of your time and capital trying to bring in new customers. While those efforts are critical, don't overlook the opportunities to get the most out of the business and assets you already have. There could be more revenue and profit hidden in your business than you realize. Here are four potential sources of hidden profits in your small business.

Former Clients. If your business has clients who, for one reason or another, have fallen by the wayside, reconnect with them. Unless you fired a customer yourself, for example, because he didn't pay his bills, open the lines of communication with each inactive customer to see if you can restart your business with him. Try to find out why an ex-customer left and what you can do to get him back. His reason for no longer doing business with you may have had nothing to do with your product or service. For example, perhaps he had to cut back during the financial downturn because his business fell off. If so, be sure he knows you want him back as a customer when his business begins to grow again.

Existing Customers. One simple but powerful strategy for generating more revenue for your business is to leverage relationships with existing customers by offering them more products and services. Look for specific ways you can help each customer grow his business and boost his profits, and then approach him with a proposal tailored specifically to his needs. Also, if you can, offer price discounts on additional products and services sold to an existing customer in order to enhance their value and make them compelling buys.

Unpaid Bills. The collections function is generally not considered a revenue center for a small business, and asking delinquent customers for payment is no one's idea of fun. However, each bill that goes unpaid represents lost revenue, so take collections seriously and get involved personally in the collections effort.

Product Line Extensions and Enhancements. Product line extensions and enhancements can be a powerful way to generate incremental, high-margin sales. Here are four reasons why they should be part of your business strategy. First, developing add-on products or services may not require much capital, since they build on existing knowledge and infrastructure. Second, a product extension or add-on may fill a gap in your product line, helping you to attract new customers and to offer more value to existing customers. Third, these products may utilize idle capacity at your business, making it more productive. For example, if you are an accountant whose business load peaks during the tax season, perhaps you could develop expertise in business retirement plans and offer your small business customers retirement planning services during the slower times of the year. Fourth, product line extensions or enhancements give you a reason to contact existing customers, and each contact with a customer is an opportunity to strengthen your relationship with him and, perhaps, to make another sale.

More from this Contributor:

http://www.associatedcontent.com/article/7750636/choosing_the_right_business_structure.html?cat=3 , Choosing the Right Business Structure for Your Small Business Startup

http://www.associatedcontent.com/article/5991358/the_many_ways_a_lawyer_can_help_a_small.html?cat=3 , The Many Ways a Lawyer Can Help a Small Business

http://finance.yahoo.com/news/First-Person-5-Things-I-Wish-ac-582320536.html?x=0

First Person: 5 Things I Wish I Had Known before Starting My Small Business

http://www.associatedcontent.com/article/7826912/writing_a_business_plan_for_your_startup.html?cat=3 ,Writing a Business Plan for Your Startup