Add To Your Bottom Line By Making The Pennies Count
If you have ever asked yourself how you can add to your bottom line this year, know that you are not alone. The question can seem to stump sign shop owners. However, you should know that, in fact, there are ways for you to produce more dollars to your bottom line and more percentage points to your net profit.
So, how can you take your store from coasting to growing? Stick with us here at shopVOX as we get into it. And don’t forget, our print shop software is always available when you need to get more organized in your shop.
Where Do Your Pennies Come In?
To understand the concept of making the pennies count for your shop, consider this straightforward scenario. Your shop likely processes estimates and orders every day. That’s how the procedure works: your customers have budgets, you find a product or service that satisfies their needs and meets their budgets, and then you complete the transaction and get paid.
What you may not realize through all this, though, is that there is actually a few-dollars-and-cents difference between increasing your bottom line and staying within a customer’s budget.
Let us ask shop owners this question. How many of you have ever sent out estimates valued at $1,482 or $673 or $700.20?
Our point is that estimates are all over the place; they are rarely round numbers. Don’t worry, though. Even if you do come up with a lot of estimates that are rounded numbers, you can still benefit from these profit-increasing tips.
Here is the crux of our argument. If you round up to the nearest dollar or cent on every estimate, and thereby still capture the sale by keeping within the customer’s budget, then you add a few extra points to your bottom line every time you make the sale.
Dollars-and-Cents Increase Examples
Let’s take the example of a modest sign shop that’s planning to make marginal increases to its bottom line with every estimate.
And let’s call that increase $0.80. For every estimate this small shop gives, it’s going to add $0.80 onto the final number. If the store adds $0.80 onto five estimates per day, the shop will potentially make an extra $4 per day.
Multiple that amount by five working days per week, and suddenly the shop is up to an extra $20 per week. Finally, compound that $20 per week by a 52-week year, and now the sign shop has made an extra $1,040 that year for its bottom line.
Now, we realize that an extra $1,000 or so a year may not seem like a whole lot of money to those of you reading this, but let’s look at another example now.
This time, let’s leave the “cents” category behind and instead focus on dollars, specifically $5. In this example, the small sign shop is going to raise its estimate numbers by $5 every time. In keeping with the first example, we can multiply that by five estimates per day to get an extra $25 per day.
If we then compound that number by five working days per week and 52 weeks per year, that shop will now add on $6,500 every year to its bottom line.
For the small shops out there, that $6,500 can increase your bottom-line percentage points by 1-3% per year, and that can be a huge jump if you’re still growing as a business.
This final example is for shops that have a bit more volume to them. They have more estimates going out every day, and they also have a bit more command over their brand and customer satisfaction. Their products and services are well reviewed, and sales are already strong.
In this case, if the store is putting out 10 estimates per day and now adding $10 onto every estimate, that’s an extra $100 per day added to gross sales. That’s $500 extra per week and $26,000 a year.
Think of all the reinvestments you can make in your business with an extra $26,000 that takes only a year’s time to accumulate. You can buy new office computers, add more staff, upgrade equipment, or whatever else you need to do to make your business better.
Grow Your Business with shopVOX
So that’s the overview of how you can make your dollars and cents count with every estimate you send out. The amounts add up, even when you don’t realize it, and they’re perfect for getting a bit of extra capital for reinvesting into your business.
Don’t forget that, if you’ve been looking for ways to make your sign shop run more efficiently, shopVOX’s sign software is here to help. From order management to customer communication, the program’s features keep everything together so you can succeed even more easily.
Get in touch with shopVOX today to get your free trial of our software!