Profitability is an extremely difficult thing for almost any online business to attain. It’s especially frustrating to look at your business’s bottom line after you’ve begun to earn significant revenue, only to find that you’re actually spending more money than you’re earning. Making any revenue at all is hard enough for many online businesses. For some, becoming profitable is even harder.

There are plenty of things that you can do to make your online business more profitable, but one of the strategies that has the highest probability of fast results is optimising your operation to earn a greater average revenue per customer. Gaining a new customer, after all, is a difficult and expensive process. Between expenses like advertising, SEO, product samples and coupons, it can often cost more to gain a new customer than what you’ll actually earn from the initial sale.

So, how do you change that? You try to earn more from the initial sale. You also do everything possible to retain the customers you have and to keep your company at the forefront of their minds. In doing those things, you’ll earn more from each customer. That will put your business on the fast track toward profitability. Here’s how to do it.

Use a Mailing List to Maintain Engagement and Keep Customers Coming Back

One of the most effective things that you can do to keep your existing customers engaged with your brand and thinking about their next purchase is email marketing. You’ve probably seen plenty of email marketing as a consumer; companies use newsletters to announce sales, launch new products and more. Maybe you’ve even considered email marketing yourself but have written it off as not worth the effort because you rarely open the commercial messages that you receive.

Some people, however, definitely do open commercial messages if they’re compelling enough. Once you’ve built a large enough mailing list, you’ll have some people opening your messages – and buying products – every time you send a newsletter. The best part is that email marketing is incredibly inexpensive. Marketing experts estimate that the return on your investment with email can be as high as 4,200 percent. That’s exactly the kind of return that you need when you’re trying to guide your business toward profitability.

The other reason why email marketing can be such an important source of traffic is because it’s the only traffic source that you can control to a certain extent. If your site ranks well on Google for a wide variety of keywords, you can expect to see traffic every day, which is great – until a change to Google’s ranking algorithm takes that traffic away someday. Search engine rankings are always in flux. When your rankings are good, you should use that opportunity to add as many people to your mailing list as possible. That way, you can use email marketing to perk your numbers up at some point in the future when your organic traffic isn’t as strong as it is now. As long as you don’t overdo it, mailing list traffic is the only form of traffic that you can almost generate on command.

Publish Evergreen Blog Content That Maximises Your Website’s Organic Traffic

If your site is getting traffic and generating consistent revenue, you’re well aware of the value of maintaining a blog because you’re probably doing it already. Since your blog will be your website’s primary home for informational content, your blog posts will rank on Google for different types of keywords than the ones for which your commercial content will rank. Top-tier e-commerce sites like V2 Cigs UK have known about this for years and have built their blogs into extensive libraries of informational content.

If you’re new to content marketing, though, you may not realise the greatest value of your site’s blog. If you can publish articles about truly evergreen topics – topics that people will still be searching for several years from now – then those articles have a chance to continue generating new customers for you long after publication. After the initial cost of producing the content, it can earn money for you for years without incurring any further expenses.

Market Your Products Creatively with Upsells, Cross-Sells and Bundles

So far in this article, we’ve discussed how to increase your revenue per customer by decreasing your cost to earn new customers and by keeping your existing customers engaged. Another way to increase your revenue per customer is by encouraging people to order additional products when they buy from you.

You’ve most likely noticed that when you view a product page on a large e-commerce site like Amazon.com, you see recommendations for related products that you might want to buy at the same time. Cross-sell and upsell recommendations are both great ways of encouraging customers to spend more when they shop on your site. Some content management systems like Magento can even add product recommendations to pages automatically. If you’re working with a free e-commerce solution like WooCommerce, though, it’s probably best not to use automatic cross-sell and upsell recommendations because they can sometimes be very inaccurate. Instead, try adding product recommendations manually.

Another way to get customers to spend more when shopping on your site is by encouraging them to buy products they might not otherwise have bought. People love product bundles and samplers, for instance, because they’re low-cost opportunities for trying new things. Can you think of any creative ways to repackage the products that you sell?

Optimise Your Supply Chain and Reduce Your Shipping Expenses

The final way to increase your revenue per customer is by making each order less expensive for you to produce and ship. Start by searching for potential ways to optimise your supply chain. Do you buy products or materials that are also available from other vendors? Try to negotiate with your existing vendor to secure a better price. If your current vendor won’t budge, look for other options. It’s very common for product distributors and vendors to negotiate on pricing with customers who are willing to buy in bulk.

Order fulfilment also eats into your profits – and shipping rates have gone up drastically over the past couple of years. If you can find a way to reduce your shipping expenses, you’ll automatically earn more from each order even though the customer’s cost is the same. Search for lightweight packaging options and find ways to reduce the amount of empty space in your shipping boxes.

That’s fantastic news if you’re considering setting up a business! You might begin as a sole trader, as many companies do. Starting up as a sole trader is pretty easy, but it is necessary to take into consideration what this entails for you (especially in the long run). 

Working for yourself or as a freelancer can be gratifying, but it is critical to set yourself up effectively. Here is everything you need to know when starting up as a sole trader such as registration, taxation, and accounting, as well as the distinction between a limited company and a sole trader.

WHO IS A SOLE TRADER?

A sole trader is an individual who operates by themselves meaning there is no barrier between them and the company, which they own and operate entirely. It is the legal term for being self-employed or running a sole proprietorship. If you wish to operate a company in the UK, you must do so through a framework. There are other choices, including setting up a limited company, partnerships, and limited liability partnerships. Trading as a sole trader implies that you are the only individual or legal entity carrying out the company.

It implies you are yourself getting into agreements, employing staff, and possibly being sued (hopefully not!). Trading as a sole trader is the most simplistic of all the arrangements, as it is free to set up and has low continuing compliance (i.e., accounting/tax) requirements. It also provides limited flexibility and legal protection, but for many small enterprises that are just getting started, it is often considered to be the best option. When the time comes, you can always convert your sole proprietorship into a limited company or another form.

SOLE TRADER VS LIMITED COMPANY:

One of the primary distinctions between a sole trader and a limited company is that as a sole trader, you are solely responsible for your firm. If you owe something or lose funds, you are personally liable. There is no distinction between personal and commercial funds. Your responsibility with a limited company is limited to the amount of money you invested into the company.

The other significant difference is just how your taxes are calculated. As a sole proprietor, you must complete a Self-Assessment tax return. In conjunction with your Self-Assessment tax return, if you run a limited company, you must file annual accounts with Companies House and pay Corporation Tax on your revenues. A limited corporation requires far more documentation than a sole proprietorship, but you may profit from less liability and higher tax efficiency.

HOW TO SET UP AND WORK AS A SOLE TRADER?

Do you want to learn how to become a sole proprietor? To pay sole trader tax, you must first apply for self-assessment. HMRC collects income tax using the self-assessment system. It is simple to apply as a sole trader online in a matter of minutes. If you haven’t already enrolled as a sole proprietor, HMRC will send you a notification with your 10-digit Universal Taxpayer Reference (UTR) & open up your account for the self-assessment online portal when you enrol.

 Whilst not imperative, it could be worthwhile opening up a separate business bank account to keep track of all of your revenue and assets, and keep it separate from personal finances. The best approach is to open a transaction account that can only be used for company revenue and expenditure, and then link it to an online savings account that you can use to set away revenue to cover your taxation when the time arrives. As a general rule, put 30 percent of each transaction into your savings account.

Once your accounting entries are set up, it is strongly advised that you use sound accounting software. Sophisticated cloud solutions provide quick access to the database and do most of the hard lifting for you, such as connecting directly to your company bank accounts, handling invoicing, wage bill, and so much more. If something is too difficult or time-consuming, appoint an accountant to do that for you – it will be worth the investment in the coming years.

You’ll also have to come up with a name for your company. You have the option of trading using your own identity or a separate one. You are not required to register your name; nevertheless, you must avoid using the name of another firm or making any allusion to a limited liability company (by using terms like Ltd, LLP, plc or limited).

CONCLUSION:

If you want to create your own company, one of the most crucial decisions you’ll have to make will be how to construct your company. And, if you decide to become a sole trader, it is a commitment that must be carefully considered, and you must obtain assistance from knowledgeable professionals when weighing the benefits and drawbacks of each corporate strategy.

If you are starting a business in the 21st century, branding is a term that will be thrown at you. Right from the get-go, when you try to gather up investors downright to when you are trying to amass clientele for your product or services, you will encounter the question, ‘What is your brand?’ more times than you can count. A business’s success is rooted in its branding because it is the one tool you will keep with you throughout your journey as a business owner. A well-crafted brand is the foundation of any business; it sets you apart from your competitors and gives your company visibility in a cutthroat industry.

Good branding is considered a valuable investment; that is why many entrepreneurs are hell-bent on building and protecting a powerful brand. Branding is a practical marketing strategy; however, it plays a significant role in increasing awareness and profitability for a business. Thus, there is a connection between branding and revenue generation and business awareness. Let’s get specific with the piece below. 

How good branding relates to improved awareness

1. It keeps your business on the client radar

Awareness is what sets apart household names from other businesses in the market. Presenting your value proposition to clients gives them a reason to choose you. When crafting a good brand, it is essential to focus on solving your client’s problem. Thus, whenever they think about a solution, your brand is the first thing that pops into their minds.

2. Provides market recall

Creating a memorable business logo is just as important as delivering promises to your customer. Brand recognition is part of brand awareness; thus, many business owners are invested in creating relevant visuals for the brand. Developing a logo customers can recall is not everyone’s forte; however, you can always bring in a professional design agency to help create visual elements that attribute to your brand and keep you in customers’ minds. A logo that prospects easily recall gains increased recognition and later improved awareness.

3. Generates new clientele

Social media has taken marketing to a whole different level, with ‘word of mouth’ remaining a top marketing tool. However, before customers can refer others to your business, they should have to and remember your brand. Only through unified branding will they share your products and services with their friends and online followers, allowing your organization to generate new customers.

4. Cultivates customer loyalty

Would you spend your money on purchases from a company you do not trust? There you go! That is the same way branding works. Branding answers the questions on your reputation and integrity as a business. Clients cannot trust you when they have unanswered questions about your company; however, you can foster trust by delivering what you advertise through branding. Building a solid brand structure inspires loyalty in clients and convinces them to choose you over and over. The awareness of your brand and the business’s reputation is what improves customer retention.

Ways successful branding leads to increased revenue

1. Increased shareholder returns

Portfolios of strong brands provide significantly larger returns with a low market risk for shareholders. For example, different reports show that companies with solid reputations offer a shareholder return of 31% higher than their competitors.

2. Faster revenue generation

Companies with strong brands are proven to have employees that are more engaged than their competitors. With this, the revenue generation tends to be thrice as much as other businesses, which means increased profits for the company.

3  Better customer connection

In the long term, companies want repeat customers. Repeat customers translate to sales which contribute to the business’s profits. But before clients can pledge their loyalty and money to you and your business, they need to know what you are talking about by understanding your brand. Good branding improves business-customer connection, and reports show that companies with better customer relations have higher revenue growth. 

Branding is a valuable investment for any business, and as seen above, there is a lot a company can benefit from creating a good brand. While a solid brand architecture is hard to nail down, the outcome has a positive impact on the business’s brand awareness and revenue generation. So reach out to an expert and focus on creating a brand that will generate interest and market visibility for your business.