12 ways to increase small business revenue in 2023
After carrying out in-depth research with micro business owners - we’ve found many have almost exhausted ways to try and cut small costs. Instead, they’re focusing on maximizing revenue during this tough, cost of living crisis.
We’re listening, and we want to help.
We advise customers on how to save money every day, but as a business - we also know how to make money. Our talented in-house team have shared actionable insights from cross-selling techniques to social media and influencer marketing advice.
So, here are our 12 ways to increase revenue for small businesses in 2023. Let’s get stuck in.
- Could your small business benefit from extra income? Here are plenty of creative ways to bring in extra cash.
- Learn about: innovative menu makeovers for cafes and restaurants, upselling and cross-selling techniques, customer loyalty programs, online ordering and delivery, events and collaborations, social media marketing, packaging services as products, new revenue streams, cutting margins, sub-leasing, lending out employees and smart cost management.
- In this blog, we dive into each idea with examples and tips on how your small business can use these to make an extra bit of cash.
Innovative menu makeovers
Shaking up your menu offering now and again helps revitalise your business, retain existing customers and help attract new customers.
Whether you run a cafe, a restaurant or any type of eatery, catering to customers’ everchanging preferences is key to staying ahead of food trends and creating them.
Offering specials or locally sourced delicacies that really set you apart from chains will help you embrace independent eatery culture and entice more customers.
For example, if you own a restaurant - you could create a brand-new menu for a unique ‘local tasting experience’ where every ingredient is locally sourced! For something simpler, you could cut down menu items and highlight your most profitable items within a ‘golden triangle’ - the area where your customers look first.
Aaron Allen and Associates, the global restaurant consultants, have this theory on the psychology of menu design: "When we look at a menu, our eyes typically move to the middle first before travelling to the top right corner and then, finally, to the top left. This has been dubbed the 'Golden Triangle' by menu engineers, and these three areas are where you'll find the dishes with the highest profit margins."
They've advised leading food service and hospitality companies around the world, so this is definitely something worth thinking about.
Upselling and cross-selling techniques
Upselling and cross-selling may sound corny, and you might think it’ll annoy customers - but there is an art to leading into an upsell that offers extra value. If what you’re offering has relevance to their original purchase - give it a go!
But what is the difference between upselling and cross-selling?
This is simply the act of selling a more expensive or high-end product or service to a customer. You are “selling up” - giving the customer something more than they originally planned, but this should be done in their best interests.
For example, if you run a car wash - you might have bronze, silver, gold and platinum packages. If a customer books a bronze package - you could ask if they would like the car waxed and hand dried for an extra shiny finish. If they agree, you can suggest upgrading them to a silver package or gold package for a small price increase, but a better service.
This is essentially selling another product to complement what the customer is already buying. Here are some examples of cross-selling in different sectors.
- In a Fish and Chip shop, if a customer orders cod and chips, cross-selling would be as simple as offering mushy peas, a sausage, or curry sauce on the side.
- Mechanics can offer extra checks to make customers aware of any upcoming maintenance and cross-sell other services customers haven’t thought of - like tyre changes.
- If you own a hair salon, you can offer extra treatments, blow dries and other extras that enhance the haircut the customer is already interested in.
- Cafes and eateries can add ‘extras’ next to mains using low-cost items that have a higher profit margin so you can increase your average transaction value.
The key is to suggest your most profitable items, without being forceful - but still clearly stating the benefits.
Customer loyalty programs
Loyal customers spend more money - who wouldn’t want that? Brand loyalty encourages spending and drives up profits. In fact, renowned executive consultants and publishers, Dr. Emmett Murphy and Mark Murphy, state that a 2% increase in customer retention has the same effect as decreasing costs by 10%!*
Approaches like points-based systems, exclusive offers and personalised rewards keep customers engaged and coming back.
Stamp cards, birthday treats, and other incentives gamify purchasing - making it fun for customers to trade with you. Plus, you can really get creative with what you offer.
If you are a coffee shop, offering stamp cards is a cheap and easy way to encourage loyalty. Offering a free pastry or coffee after 10 visits is simple and easy to do while making it viable by using low-cost items. You can order branded stamp cards on sites like Stamps Direct.
It might feel like you're simply giving away free stuff at a time when you can least afford it, so make sure you can absorb the costs when working towards a longer-term payoff like customer loyalty.
Embrace online ordering and delivery
The coronavirus pandemic saw some businesses shift online, with the importance of having an online store key for survival. 1 in 10 SMEs shifted to digital during this time, allowing for services like online delivery to really take off.
Even if you don’t have an online shop front, partnering with delivery apps such as Deliveroo, JustEat and UberEats could help you capture some extra revenue during quiet periods.
Not sure where to begin?
- Start by analysing your point of sale (POS) data. This is the information that is collected from your POS systems, like cash registers and card readers. You can use it to find quiet times and think about providing deals during these spots to increase new sales.
- Do you have slower trade on certain days, like Mondays? Offer half-price mains to draw people in and make Monday the new Friday for half the price.
- Are you losing trade to home workers? The ‘work from home’ (WFH) trend has dented businesses in city centres but you can still serve these customers. A WFH meal deal could be your answer. This doesn't necessarily need to be discounted - but packaged as an attractive deal for a new need.
You could even advertise this on your actual premises, so you’re top of mind when workers are hungry but working from home.
Unique events and collaborations
Getting together with like-minded businesses for event marketing, not only exposes your brand to new customers, but it can also make you stand out against your competitors.
Leveraging the customers of your collaborator means more people might buy from you!
Consider offering something completely unique in your area to drive up new interest and sell event tickets - making your business an extra bit of income.
Need ideas? Use your talents
- If you own a hair salon you could offer ‘party hair’ workshops and teach people ways to style hair for birthdays, weddings and even proms! You could even collaborate with local independent eateries for snacks and refreshments and sell tickets as an evening event! Promoting this in your salon, on social media and in local newspapers will help spread the word about an exciting event like this.
- If you own a bakery - why not host a bread-making morning? Or if you own a bar, you could host an open mic night or a live music night by finding a local musician to do a gig for a small fee. Or maybe even a cocktail-making masterclass. But remember, if you've not already got them then you'll need specific business licences before you can host live music and sell alcohol.
- Using local influencers on social media to help promote these events could drive up interest, or even making a Facebook event for these and sharing them within your customer base via your email list will help spread the word.
Social media marketing
As mentioned above, social media is a powerful tool when it comes to marketing. Not on social media? There are so many social media platforms It’s understandable you don’t know where to begin.
Here’s how to get started:
Ask your customers what social media platforms they use - you can even drop this into conversations with customers as you serve them.
- Once you know, you can get set up on Facebook, Instagram or even TikTok if you want to give your hand at video content.
- Post photos of your business, menus, dishes, and employees and encourage customer interaction with competitions, promotions and offers.
- The more people know about your offers - the more likely they are to visit and spend!
You can even grow your business online with social media hacks. Want to know more? Read our full guide on how to create a social media marketing strategy for your business.
Package services as products
If your business makes the most money selling services, you could make even more by packaging your services and assigning set prices. How?
Changing from service to a package alters the perception in the mind of the customer - from something that is abstract to something that is tangible and easier to understand.
But how do you do it?
- Focus on the benefits of your service rather than features
- Focus on clear outcomes, not your experience or expertise
- Package and bundle services into products with set prices
Like mentioned earlier, one way of doing this is to package levels of service into ‘Bronze, Silver, Gold or Basic, Plus and Premium’. This approach is great for mechanics, consultants or any service-based businesses that want to sell more than a single service.
Trade at lower margins
What if you could sell more but at lower prices? During times when inflation is high and businesses are putting up prices, customers may be attracted to good deals. Lowering your margin means you may make less profit, but if it's reflected in your prices then you could sell more volume. Especially with effective marketing around any price changes.
But what does this mean in practice?
If you're a restaurant and you lower your margins and prices on main dishes - you take less profit from the items you sell, but you could entice customers in with low-cost products. If you price items lower, customers might buy more of them because it's such a good deal. This means you could make more revenue than you would otherwise.
Having smaller margins doesn't work for every company in the long run. But it's a strategy to consider if you're struggling to get customers through the door in the short term.
Diversify your revenue streams
Finding creative ways for your business to generate more revenue could be through other activities.
There are four main types of revenue streams. Having two or more ways to spread your income means you can also spread risk. So, if you find one revenue stream is slowing down, you can rely on another to make money. This may help give peace of mind during difficult financial times.
Let’s get to grips with the four types:
- Project-based revenue - A project for a set price that is agreed for an amount of time e.g. a web designer taking on a new website build project.
- Transactional-based revenue - Most commonly consumer goods that are purchased for a one-off payment e.g. a laptop.
- Serviced-based revenue - Income from services that are sold based on time e.g. hours a lawyer or a consultant charge for a case.
- Reoccurring based revenue - Earnings from ongoing goods or services like online fitness class subscriptions, or aftercare packages for glasses etc.
What does this mean in practice?
Have you ever considered selling branded merchandise? Like beer glasses if you own a bar or exclusive memberships if you are a jeweller - where customers get the first pick by paid invite only?
Selling different products than your normal offering increases your appeal to existing customers and potential customers. It makes them do a double take and keeps them engaged.
Not for you? Perhaps you could diversify your income with another small business? Read our full-on guide on the most profitable side hustles in 2023.
Lend out your employees
If you’re in a situation where your employees want more work, but you need to cut down their shifts due to fewer customers, why not subcontract your staff or make them available for hire?
For example, if you run an office with talented managers - you could offer them up to other offices for management training sessions or team-building. This works even better if you specialise in a certain area e.g. If you have sales consultants working for you. You could offer sales team management training to aspiring young leaders in other companies.
This also works for bar and restaurant staff, including cooks, hair stylists, gyms and personal trainers, and employees from loads of other industries.
Employees might find having a day out exciting, plus leading training experience is a great addition to someone’s CV. It also shows that you are proud of your employees and want them to represent your company elsewhere.
Subcontracting your premises
Why not hire out your premises? If you have a space that you aren't using - someone might want to hire it. This could apply to any small business with an empty warehouse, studio or office space.
For example, if you have a long lease on an empty warehouse and you're struggling to pay for it - you could sub-contract it for a certain amount of time. This means that you still rent the property but the property is re-occupied by someone else. This helps you pay the rent and provides extra income. And once the sub-lease is up, you can use it again.
Sub-leasing can really help during quiet trading periods. You can also decide how long to set it, so if trade picks back up you can always claim the space back after the sub-lease is up. If you're renting a property that you want to sub-let, you'll need to check with your landlord first.
Smart cost management
You might feel exhausted from trying to find angles to cut business costs. But before you give up, make sure you’ve considered everything.
Business costs could be anything from supplier costs, employee costs, rent and tax and you could make cuts by investing a bit of time into making some changes. Read our full guide on reducing small business costs to find out how.
Have you thought about your business utility costs? What if you could rethink the amount of power you are using? Our Senior Content Manager - Les knows all about small business energy as a previous tea shop owner - read his guide on saving business energy for shops and soak up his knowledge.
Do you think you paying too much for your utilities? See if a ‘Blend and Extend’ contract could help you save money on business energy in the long run.
How Bionic can assist you
To see if you could save, put your postcode in the box on the right, or give our tech-enabled team a call on 0800 327 7384 and speak with an advisor today.
Sources: *Leading on the Edge of Chaos: The 10 Critical Elements for Success in Volatile Times, authors Dr. Emmett Murphy and Mark Murphy