We often think adding a second location or more square feet is the only way to expand, when, in reality, there are many ideas for expanding a business that add revenue – and boost profits – without adding additional overhead in the process.
Expanding a Business – 5 Ways to Boost Revenue Per Square Foot in Your Business
Price per square foot – it’s one of the biggest costs of doing business. Whether you own or lease, for each square foot you pay for, you must be able to generate a minimum amount of revenue per square foot over and above that number, just to break even. To grow, you must be able to get even more profit out of each square foot of your business.
What does each square foot of your business cost? It’s much more than the price per square foot reflected in your lease agreement. The real cost of doing business, for each square foot, includes each and every expense of your business, including supplies, inventory, insurance, taxes, payroll, etc., divided by the number of square feet in your business.
But you can also calculate revenues or profit for each square foot of your business. In fact, it’s important to be aware of these numbers because for your business to be profitable and generate the money you need to grow, profit per square foot must exist, which means you need to know how much revenue per square foot your business must generate to produce a profit.
If a business can’t produce a profit (money left over after expenses and depreciation), it will have a difficult time growing, because most growth strategies require capital. Capital is where we come in. In particular, when it comes to implementing growth strategies, commercial cash advance financing can provide a business with fast access to the money it needs to grow to the next level.
Essentially, business cash advances provide an organization with a lump sum of working capital which is repaid out of future sales. This is one reason that it’s a great option for businesses that want to use a cash advance to finance inventory, equipment, marketing, or other capital expenses that will lead to increased revenue or open up new streams of revenue.
In fact, one of the best parts about being in the business of cash advance financing is hearing about how our clients use their cash advance to grow. While some do use cash advance financing to add a second business location or incorporate adjacent vacant space because they need additional square footage to grow, others add new lines of revenue without incurring as much additional cost, essentially expanding a business without adding physical space.
Growing a Business – 5 Ways to Expand Without Adding Square Feet
In just about every industry, as technology evolves, not only does newer equipment provide you with the ability to enhance a product or service or produce a completely new one, it often does so on a smaller footprint. When the benefits of increased efficiency, productivity and reduced space requirements add up to new or boosted business revenue, it might be smart to upgrade. This is where expanding a business in it’s current location without adding square feet can help.
Likewise, if you have enough space to add new equipment, you may be able to add whole new lines of revenue to your business in the form of new products or services. If your competitors are providing products or services you aren’t, or you would like to provide customers with items they typically purchase right before (or right after) purchasing yours, this might be an area where adding new equipment could give your business revenues a big boost.
The cost of adding new equipment may be well worth the expense, even if you take on a business financing obligation in the process. You also need to consider what the cost of not adding new equipment could be, especially if your competitors are gaining market share because they can serve clients products or services that your business is not equipped to provide.
New Skills and Training
In service-based industries like salons and spas, dental, medical, etc., education and training can be a vehicle for adding new lines of revenue without adding square footage, and sometimes even without a significant investment in equipment or inventory. As with equipment, assessing advantages of competitors or innovations and trends being pursued by industry leaders can provide insights as to what new services might be most successful with your target markets, which can point you in the right direction when it comes to investing in education and training.
In addition, new service revenues often go hand-in-hand with new product sales, especially when services are enhanced by products customers can use at home or in between appointments.
Periodically changing your inventory is smart business. Phasing out slow-movers can allow you to make ways for new items which can re-engage your customer base or allow you to target an expanded market segment and bring new customers in to your business. Phasing out slow-movers can even spark demand. In fact, limiting customer access to certain products or services to specific periods of time during the year might mean you sell more of those items than you would were they available year-round.
Bringing in consultants or hiring new staff can help you expand your business. Hiring new employees strategically for specific skills they bring to the table may give you the ability to launch new products or services (or enhance those you already offer). New hires and consultants also help to bring a fresh perspective. They can point out areas of opportunity and help you see your business through “fresh eyes.” As a result, you may be able to identify new markets for your products or services or eliminate inefficiencies or obsolescing items in order to make room for others.
While the underlying values that guide your organization may never change, your brand identity will probably change over time. These changes might be small and reflected in tweaks to the logo, brand taglines, marketing campaigns and colors, or they might be big, and be accompanied by a completely new mission statement, vision for growth, and a new logo – possibly even a new name.
Big changes to brand identity might reflect big changes in leadership; however, they might also be necessitated by big changes in the marketplace or business model. Along with a change to consumer perception, this also provides a business owner with an opportunity to remake the business itself, including tweaking or completely changing its menu of goods or services.
For most businesses, change is an imperative. If you need working capital for expanding a business, we can help. Get access to money you can use to expand your business (whether that means adding square footage or not) using a merchant cash advance.
Start by requesting a totally free, no-risk quote – a merchant cash advance could provide you with the money you need to grow your business within days: