What is the fastest way to increase profit in a small business?

For many businesses it is reviewing prices, followed by stopping or repricing unprofitable work. Both can show results within weeks.

Should I cut costs or increase sales to grow profit?

Usually both, but start with pricing and the mix of work. Cutting costs has a floor; better pricing and better clients do not.

How do I know which clients are profitable?

Track the time and costs each client or job takes against what they pay. Even a rough estimate for your top twenty clients is revealing.

Can a business coach help increase profit?

Yes, by helping you find the right levers, make the decisions and follow through. For accounting and tax advice, talk to your accountant.

How to Increase Profit in a Small Business: 7 Practical Levers

More sales do not always mean more profit. Sometimes they mean more work, more stress and the same number at the bottom of the page.

Here are seven practical levers for increasing profit in a small business. Most owners find two or three that make a real difference.

Book 15 with Tom

1. Review your prices

Pricing is usually the fastest lever, and the one owners avoid. If you have not reviewed prices in the last year, start here. Our guide to raising prices in a small business walks through how.

2. Know which work makes money

Look at profit by service, product or client, not just total revenue. Some work quietly loses money once you count the time it takes. Stop it, reprice it or change how it is delivered.

3. Fire the wrong clients, nicely

A small number of clients often take a large share of the effort and the headaches. Parting ways politely can free capacity for better work. Our piece on breaking up with a client nicely shows how.

4. Sell more to people who already trust you

Existing customers already know you. A follow up offer, a maintenance plan or simply asking what else they need is usually cheaper than finding new customers. Referrals help too; see how to get more referrals.

5. Cut waste, not muscle

Go through regular costs line by line. Cancel subscriptions nobody uses, renegotiate contracts and look for rework, the jobs done twice because they were not right the first time.

6. Make the team more effective

Clear roles, good meetings and fewer interruptions raise output without raising costs. Running an effective team meeting is a good start.

7. Spend the owner's time on the highest value work

If the owner spends the week on tasks worth far less than their time, the business pays for it. Delegating well is a profit strategy, not just a lifestyle choice. See how to delegate as a business owner.

Where to start this week

List your services or products and estimate the profit on each
Identify your three most demanding clients and what they really earn you
Cancel one cost nobody would miss
Pick a date to review prices and put it in the diary

Small, steady improvements across a few levers usually beat one dramatic change. Check the effect in your weekly numbers and keep what works.

Bring one business wobble

Fifteen honest minutes with Dr Tom Hitchcock. Bring the problem you cannot quite name. No surprise proposal ambush and no hard sell. If coaching is not the right move, Tom will tell you, and usually point you somewhere useful.