‘Business must run at a profit, else it will die. But when anyone tries to run a business solely for profit, then also the business must die, for it no longer has a reason for existence.’ – Henry Ford
It’s no secret that I love marketing. I’ve been doing it for seven to ten-figure b2b and b2c companies for over two decades. But compared to profit-maximizing strategies, marketing takes a back seat.
Marketing is not only good; unless you want your business and brand to languish into obscurity, allowing your competitors to leave you in their wake, it’s fundamentally necessary.
But marketing, even the best marketing in the world, requires time, cash investment, and the willingness and ability to take risks.
On the other hand, every profit-maximizing strategy you leverage and install in your business provides immediate gains to your financial bottom line. Not only is this good for your overall cash flow and ability to reinvest into your business, but it also makes your business more valuable when you decide to exit.
Not a reader? Not a problem. Listen instead. 🎉
Check out the Spotify podcast episode below, where I walk you through the 16 profit-maximizing tips I cover in this article.
16 Profit Maximizing Strategies
1. Advanced Tax Strategies | The Augusta Rule
Let’s start with strategic tax planning. In addition to a plethora of other advanced tax strategies you could be leveraging to legally and ethically save money on your taxes, The Augusta Rule is one most people are unaware of.
The Augusta Rule, otherwise known to the IRS as Section 280A, allows a business owner to rent their primary residence or vacation home to their business for up to 14 non-consecutive days each year. The residence can be located anywhere in the United States, and the income is excluded from taxable income for the residence owner. I am not a tax professional, so speak to your CPA or tax strategist about how you can leverage this tax strategy in your business.
2. Treasury Management
If your business keeps any significant amount of retained earnings or cash on hand (COH), you might want to consider finding your own treasury management partner.
Many business owners and leaders are unaware of the fact that rather than keeping their COH in a checking or low-yield savings account, you could partner with a treasury management team (private equity typically) to get an additional 2% – 3% return on the money that’s already in your bank account.
3. Pricing Strategy Review
Consider analyzing your pricing structure and determine if there is room for adjustments. Do research and testing around increasing prices for high-demand products or services and introduce your customers to additional premium offerings.
4. Cost Reduction
Identify areas in your business where costs can be minimized without compromising the quality of your products, services, or team culture. This could include negotiating better deals with suppliers, optimizing your supply chain, or finding more cost-effective alternative providers.
‘Profitability is about running a business well, not about corporate largesse.’ – Warren Buffet
5. Improve Operational Efficiencies
Evaluate how you can streamline your processes to eliminate inefficiencies and reduce waste. This can involve automating tasks, improving inventory management, or implementing leaner practices.
6. Expand Market Research
Look into exploring new markets or segments that align with your products or services. Conduct some market research to identify untapped opportunities and develop targeted marketing campaigns to attract customers from new industry vertical areas.
7. Increase Customer Retention
Invest more time into focusing on building stronger relationships with existing customers to encourage repeat business. Offer loyalty programs, personalized experiences, and excellent customer service to create a loyal customer base.
8. OTO’s, Up-Sell, & Cross-Sell
Encourage customers to purchase additional products or services by offering relevant upsell or cross-sell opportunities. This can be done through targeted recommendations, bundle offers, or complementary product suggestions.
Also, consider adding OTOs (One-Time-Offers) into your products or services to increase your AOV. (Average Order Value)
‘Good businesses generate missions to drive their profits. Great businesses generate profits to drive their missions.’ – Tony Hsieh
9. Improve Marketing Efficiencies
Evaluate your marketing efforts and identify areas for improvement. Optimize your digital marketing strategies, how you’re leveraging social media platforms, and utilize analytics to track the performance (aka marketing attribution) of your campaigns.
10. Enhance Your Online Presence
Invest in improving your website’s user experience, search engine optimization (SEO), and mobile responsiveness. Utilize online advertising and content marketing to drive more traffic to your website and online offers and increase conversions.
11. New Products & Services
Innovate and diversify your offerings to meet evolving customer needs. Conduct market research to identify gaps or opportunities and invest in research and development to create new products or services that can deliver more revenue and profitability to your bottom line.
12. Strategic Partnerships
Investigate and strategize around how you can collaborate with complementary businesses to expand your reach and access new customer segments. Look for opportunities to cross-promote, share resources, or co-develop products and services.
13. Optimize Cash Flow Management
Monitor and manage your cash flow effectively to ensure timely payments from customers and manage expenses efficiently. Consider negotiating favorable payment terms with suppliers and incentivize early payments from customers. If you accept credit card payments from customers, consider pivoting over to ACH payments instead. This lone could add 2% – 3% back into your profit margins.
Don’t forget what you learned in principles number 1 and 2 above.
14. Improve Employee Productivity
Consider investing in employee training and development programs to enhance their skills and productivity. Encourage employee engagement, reward high performance, and foster a positive work environment.
15. Focus On High-Margin Offers
Focus on high-margin products and services. Analyze your product/service portfolio and identify offerings with higher profit margins. Allocate resources and marketing efforts towards promoting these higher-margin products/services.
16. Improve Relentlessly
Foster a culture of continuous improvement within your organization. Encourage employee suggestions, conduct regular performance evaluations, and implement feedback loops to identify areas for improvement and optimize processes.
Remember, every business is unique, so it’s important to assess these strategies in the context of your specific industry, target audience, and business goals.
Click here if you’d like to know more about how to maximize the profitability of your business by 10%-30% or more.
About the author.
Brian Webb is a 22-year entrepreneur, private investor, business & profit growth mentor, a B2B marketer, and the host of the Business Growth Show podcast.
In addition to managing a growing portfolio of businesses, Brian is the CEO of the award-winning marketing and business growth consulting agency in The Woodlands, Texas (Greater Houston Metroplex), Whatbox Digital, LLC.
You can find Brian on Apple, Google, Spotify, Pandora, iHeartRadio, and Amazon. Brian’s writings have been published and featured on NBC, ABC, CBS, FOX, and MarketWatch, and has been approved as a Forbes Business Council member and content contributor.
You may also recognize some of Brian’s anchor clients like Coca-Cola, Comcast, Coldwell Banker, Entrepreneur’s Organization, Hospital Corp of America, and Karbach Brewing, to name a few.
‘Business must run at a profit, else it will die. But when anyone tries to run a business solely for profit, then also the business must die, for it no longer has a reason for existence.’ – Henry Ford
It’s no secret that I love marketing. I’ve been doing it for seven to ten-figure b2b and b2c companies for over two decades. But compared to profit-maximizing strategies, marketing takes a back seat.
Marketing is not only good; unless you want your business and brand to languish into obscurity, allowing your competitors to leave you in their wake, it’s fundamentally necessary.
But marketing, even the best marketing in the world, requires time, cash investment, and the willingness and ability to take risks.
On the other hand, every profit-maximizing strategy you leverage and install in your business provides immediate gains to your financial bottom line. Not only is this good for your overall cash flow and ability to reinvest into your business, but it also makes your business more valuable when you decide to exit.
Not a reader? Not a problem. Listen instead. 🎉
Check out the Spotify podcast episode below, where I walk you through the 16 profit-maximizing tips I cover in this article.
16 Profit Maximizing Strategies
1. Advanced Tax Strategies | The Augusta Rule
Let’s start with strategic tax planning. In addition to a plethora of other advanced tax strategies you could be leveraging to legally and ethically save money on your taxes, The Augusta Rule is one most people are unaware of.
The Augusta Rule, otherwise known to the IRS as Section 280A, allows a business owner to rent their primary residence or vacation home to their business for up to 14 non-consecutive days each year. The residence can be located anywhere in the United States, and the income is excluded from taxable income for the residence owner. I am not a tax professional, so speak to your CPA or tax strategist about how you can leverage this tax strategy in your business.
2. Treasury Management
If your business keeps any significant amount of retained earnings or cash on hand (COH), you might want to consider finding your own treasury management partner.
Many business owners and leaders are unaware of the fact that rather than keeping their COH in a checking or low-yield savings account, you could partner with a treasury management team (private equity typically) to get an additional 2% – 3% return on the money that’s already in your bank account.
3. Pricing Strategy Review
Consider analyzing your pricing structure and determine if there is room for adjustments. Do research and testing around increasing prices for high-demand products or services and introduce your customers to additional premium offerings.
4. Cost Reduction
Identify areas in your business where costs can be minimized without compromising the quality of your products, services, or team culture. This could include negotiating better deals with suppliers, optimizing your supply chain, or finding more cost-effective alternative providers.
‘Profitability is about running a business well, not about corporate largesse.’ – Warren Buffet
5. Improve Operational Efficiencies
Evaluate how you can streamline your processes to eliminate inefficiencies and reduce waste. This can involve automating tasks, improving inventory management, or implementing leaner practices.
6. Expand Market Research
Look into exploring new markets or segments that align with your products or services. Conduct some market research to identify untapped opportunities and develop targeted marketing campaigns to attract customers from new industry vertical areas.
7. Increase Customer Retention
Invest more time into focusing on building stronger relationships with existing customers to encourage repeat business. Offer loyalty programs, personalized experiences, and excellent customer service to create a loyal customer base.
8. OTO’s, Up-Sell, & Cross-Sell
Encourage customers to purchase additional products or services by offering relevant upsell or cross-sell opportunities. This can be done through targeted recommendations, bundle offers, or complementary product suggestions.
Also, consider adding OTOs (One-Time-Offers) into your products or services to increase your AOV. (Average Order Value)
‘Good businesses generate missions to drive their profits. Great businesses generate profits to drive their missions.’ – Tony Hsieh
9. Improve Marketing Efficiencies
Evaluate your marketing efforts and identify areas for improvement. Optimize your digital marketing strategies, how you’re leveraging social media platforms, and utilize analytics to track the performance (aka marketing attribution) of your campaigns.
10. Enhance Your Online Presence
Invest in improving your website’s user experience, search engine optimization (SEO), and mobile responsiveness. Utilize online advertising and content marketing to drive more traffic to your website and online offers and increase conversions.
11. New Products & Services
Innovate and diversify your offerings to meet evolving customer needs. Conduct market research to identify gaps or opportunities and invest in research and development to create new products or services that can deliver more revenue and profitability to your bottom line.
12. Strategic Partnerships
Investigate and strategize around how you can collaborate with complementary businesses to expand your reach and access new customer segments. Look for opportunities to cross-promote, share resources, or co-develop products and services.
13. Optimize Cash Flow Management
Monitor and manage your cash flow effectively to ensure timely payments from customers and manage expenses efficiently. Consider negotiating favorable payment terms with suppliers and incentivize early payments from customers. If you accept credit card payments from customers, consider pivoting over to ACH payments instead. This lone could add 2% – 3% back into your profit margins.
Don’t forget what you learned in principles number 1 and 2 above.
14. Improve Employee Productivity
Consider investing in employee training and development programs to enhance their skills and productivity. Encourage employee engagement, reward high performance, and foster a positive work environment.
15. Focus On High-Margin Offers
Focus on high-margin products and services. Analyze your product/service portfolio and identify offerings with higher profit margins. Allocate resources and marketing efforts towards promoting these higher-margin products/services.
16. Improve Relentlessly
Foster a culture of continuous improvement within your organization. Encourage employee suggestions, conduct regular performance evaluations, and implement feedback loops to identify areas for improvement and optimize processes.
Remember, every business is unique, so it’s important to assess these strategies in the context of your specific industry, target audience, and business goals.
Click here if you’d like to know more about how to maximize the profitability of your business by 10%-30% or more.
About the author.
Brian Webb is a 22-year entrepreneur, private investor, business & profit growth mentor, a B2B marketer, and the host of the Business Growth Show podcast.
In addition to managing a growing portfolio of businesses, Brian is the CEO of the award-winning marketing and business growth consulting agency in The Woodlands, Texas (Greater Houston Metroplex), Whatbox Digital, LLC.
You can find Brian on Apple, Google, Spotify, Pandora, iHeartRadio, and Amazon. Brian’s writings have been published and featured on NBC, ABC, CBS, FOX, and MarketWatch, and has been approved as a Forbes Business Council member and content contributor.
You may also recognize some of Brian’s anchor clients like Coca-Cola, Comcast, Coldwell Banker, Entrepreneur’s Organization, Hospital Corp of America, and Karbach Brewing, to name a few.