How to Double Your bar Business Income: The Basics
The purpose of your bar Business, or anyone else's business for that matter, is to earn profit while fulfilling the needs or wants of its customers.
Among the biggest difficulties business owners face is the temptation to leap in without a plan. To increase business they dabble in ideas. Never really embracing a solid strategy, they simply trust one of their endeavors will eventually pay off and cause their business to soar to new heights. In most cases this is a recipe for failure.
Among the biggest difficulties bar Business owner's face is the temptation to leap in without a plan. To increase business they dabble in ideas. Never really embracing a solid strategy, they simply trust one of their endeavors will eventually pay off and cause their business to soar to new heights. In most cases this is a recipe for failure.
The vast majority of bar Businesses require a certain amount of care and deliberation be paid in order to insure business growth and success. There are a number of ways to grow a business, but there are four basics that umbrella nearly all other means.
First, increase customer base. That is to say, turn your new, fresh prospects into loyal, purchasing customers.
Second, increase buying frequency. Or cause your customers to spend money more often with your establishment.
Third, increase profit margin. That is for each sale made, make more money.
And fourth, increase your client's buying lifespan. Cause your customers to continue doing business with you for an extended length of time.
Most owners in the bar Business tend to spend their finances and energy focusing on the first step-increasing their customer base. Although this is an important part in creating a successful business, it is also very costly and less productive than the other methods. Remember, as discussed in an earlier portion of this program, 80% of your business comes from 20% of your existing clientele.
Increasing the frequency of customer purchases is a more valuable step in the business growth process. This step begins with identifying customer needs and creating ways to meet those needs. Whether through special offers or added services or products, it is your goal, as the business owner, to find creative, profitable ways to meet those needs.
Next, increasing your profit margin on every sales transaction can effectively and radically raise your incoming revenue to new heights. Fast food chains are masters at this method of growing their businesses. Who hasn't ordered a Happy Meal for their kids, complete with a child's toy, or a Whopper Value Meal? This form of bundling adds profitability to the business' bottom line and the perception of added value to the customer.
Finally, increasing the buying lifespan of your customers plainly increases your chances of selling more of your products or services to them, thus further increasing your earnings at a fraction of the cost of drawing new customers.
Further, the longer they purchase from you, the more loyal they will tend to become as they continue to reap the benefits of your products or services. Not only does this translate into increased revenue, but increased potential for referrals as well.
When implemented together or independently each of these basic concepts can dramatically improve your bottom line (It's okay if these numbers don't make total sense to your business, but understand the idea). For instance, say your bar Business has a customer base of 1,500. They spend $150 twice a year on average, and remain loyal to you for 3 years. After that 3 year period those customers would have spent $1,350,000 at your bar Business. Grow just 5% in those four categories and you have an overall increase of just over 20%.
With each increase in percentage, even relatively small increases, your bottom line begins to climb.
Further, a 15% the cumulative percentage increase would be about 75% and at 30% there is a whopping cumulative increase of just over 185%. Not too shabby by anyone's standards! Take a look at the chart below to get a better picture.
|Client Base||Spend Each Purchase||Quantity of Purchases per Year||Buyer Lifespan in Years||Total Revenue|
Consider your bar Business. Is a 5% growth in these categories reasonable? Could you bring in just 5% more people to buy from you? Can you manage 5% more from each transaction? How about how often they buy from you, could that be increased 5%? Finally, how manageable would it be to get those people that have been buying from you, have known you, and have trusted you, to remain loyal to you a mere 5% longer?
Looking at it in this light shows how reasonable it can be to fulfill these objectives, the reward being an amazing increase in profits as we've demonstrated.
Some of these areas may be more difficult to increase than others. Some may be easier. And of course, not all the percentage increases will be exactly the same.
The point is to take a cold hard look at these areas and identify where you can make improvements, even if they are small. Any improvement in these areas cans still have remarkable results. For example, using the chart above, figure you are able to increase your increase your customer base 15%. To get them to spend more proves challenging so there is only a 5% increase there. You also manage to get your customers to purchase more often at an increase of 15%. And because your customers have grown to trust you and like you there is an increase in their buying lifespan of 30%. Your total would be $2,434,036-an increase of 1,087,036 or roughly 80%!
You can recreate this chart and put in data that more closely resembles accurate figures for your bar Business. Simply fill in your customer base and your averages then calculate in some percentage increases into these areas. Plug in percentages you see as realistic and feasible for your bar Business.
Now what are some of the ways you can begin growing these four basic areas right away?
Please see "The bar Business Marketing System for Radical Results"