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Feeling the Squeeze? Here Are 6 Ways to Help Maintain Your Business Margins

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Feeling the Squeeze? Here Are 6 Ways to Help Maintain Your Business Margins

By Caron_Beesley, Contributor
Published: May 14, 2012 Updated: September 28, 2016

Is the marketplace squeezing your margins? Do your customers have less disposable income to spend? Are market forces making it harder for you to stay profitable?

Making money is a perennial challenge for small business owners, and simply increasing your prices or selling more products or services – often at compromised margins – isn’t always the answer.

So, what sustainable strategies can you use to maintain and grow your margins? There’s no one-size-fits-all silver bullet, but here are some suggestions that might pay off, with your hard work and creativity.

1. Focus on Revenues

Look for ways to ensure predictable revenues. Set targets and ensure the business as a whole is held accountable, including your employees. Look for ways to lock clients into longer-term contracts. This might mean cutting your rates, but the long-term predictable volume will pay off.

Drop clients who aren’t key to your business or are simply unprofitable. Instead, refocus on building relationships with your existing clients, and invest in marketing to keep your revenues growing. This will help you plan for variables, such as losing clients or market changes.

2. Don’t Cut Your Marketing – Do More

While customer service is a huge differentiator for small businesses, customers can only experience that service if they use your business.  So once you’ve got them through the door, do everything you can to keep them coming back. This means making sure you stay top of mind with compelling marketing tactics. Here are a few to think about:

  • Step up your email outreach and up the ante on your special offers – Review past offers. What worked and what didn’t? Did they actually erode margins in an effort to drum up business? Think of ways to market a special without devaluing it or undercutting yourself. Remember, consumers want perceived value for money, but you’ve still got the same costs to cover.
  • Consider striking deals with businesses in your community and offer specials to employees. This won’t work for all businesses, but if you are in the service industry, it’s a great way to drum up repeatable traffic.
  • Reward loyalty – Instead of targeting coupon-clipping one-off customers, reward those who keep coming back. Loyalty programs have made quite a comeback in the past few years, and can take many forms. Examples range from point-based earn-as-you-spend systems to special offers that reward your most loyal customers. You’ll have to do a little list segmentation for this, or set up a program that encourages repeat visits, like “Visit us for lunch four times during the month of May and get your fifth lunch free.”

Get more tips in this blog: How to Cut your Marketing Budget and Build your Brand Profitably.

3. Re-Engineer Your Business Processes

Look for ways to do business differently. Is there a way to use technology to streamline processes? Would an investment in how your products are delivered pay off over the long term? How are your quality controls? Many businesses lose time and money fixing products or services that are delivered subpar.

4. Pay Attention to the Details

Money is in the details. Pay attention to them. For example, cross-check any inventory or deliveries from wholesalers so that you are 100-percent sure you are getting everything you paid for. If you operate a food service business, make sure your staff is properly trained to serve the right size portions or that food isn’t perishing because it’s not stored properly. What about your expenses? Small yet recurring charges and costs can quickly add over time.

5. Consider Hiring a Business Development Professional

Hiring might not seem like a good idea when margins are tight, but if your current business strategy is eroding your margins, making an investment in someone who can help steer your business down a more profitable course might make good business sense. If you simply don’t have the capital resources to do this, get advice from an organization like SCORE. SCORE has a huge network of small business mentors who have walked in your shoes and will consult for free.

6. Align Your Operations Around Customer Service

Is everyone on your team singing from the same hymnal? Consistently, good service is a huge differentiator in a tough economy and any setbacks can quickly impact your margins. From your phone lines to your website, front of house to the point of sale, do you have a good view of the customer service experience? Is every staff member doing what they need to be doing, without being asked?

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About the Author:

Caron Beesley


Caron Beesley is a small business owner, a writer, and marketing communications consultant. Caron works with the SBA.gov team to promote essential government resources that help entrepreneurs and small business owners start-up, grow and succeed. Follow Caron on Twitter: @caronbeesley


The point on increasing your marketing efforts is spot on. Companies normally cut back during tough times, however the opposite is true. Step up on the marketing! Especially during recession!
I agree with Melissa we really started looking at the marketplace and how we could keep our market share, but look at things to start to grow our business. We started with some programs/specials for business in our community and it has really paid off for us. Thanks Caron
Am I feeling a squeeze? Yeah the last 2 years have been subpar for my business. This is great advice, especially paying attention to detail. Having your own business has its ups and downs, but I wouldn't trade it for the world!
I agree with Melissa we really started looking at the marketplace and how we could keep our market share, but look at things to start to grow our business. We started with some programs/specials for business in our community and it has really paid off for us. Thanks Caron for a great post.
I love #2 about marketing. In corporate america, especially in publicly traded companies, it seems that when there is a need to make the books look good marketing is one of the first things on the chopping block. Sometimes this mentality carries over to small business owners. In reality, if executed effectively, marketing dollars can be increased during down times.
you forgot to add check your cashflow as that is an important part

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