Most sign company owners think the only way to make more money is increase sales. While increasing sales should put more money in your pocket, increasing profit margins is just as important. If you're searious about making more money, here are 5 key ways to increase profit margins for sign companies.
1. Figure Out Your Sign Gross Profit Margin
Gross profit margin refers to the proportion of money left over from the genearted revenue after taking the cost of the sign you are selling into account. Your gross profit margin is then the source to pay additional expenses and savings for the future.
In order to increase profit margins, you first need to make sure you know current profit margins for your sign company. Be sure you are using current costs and not old or averaged costs from a year ago to ensure an accurate starting point.
2. Review Digital Sign Prices
Don't charge every customer the same amount. Consider how some customers from larger organizations will have a larger and more flexbile budgets. Be sure to take the financial means of your customer into consideration when putting together a quote and proposal for their sign.
Taking advantage of opprotunities to sell signs at a higher rate can be a great way to increase profit margins.
3. Evaluate Sign Production Turnaround Time
The faster your turnaround from order to delivery, the better your profit margin. Look to see if there are any processes you can eliminate or ways to shorten parts of the production process. Consider the role your sign dealers play in the process and evaluate how changes might have a positive impact.
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4. Up-Sell and Cross-Sell Your Signs
When you increase the amount you sell to your customer at one time you will increase profit margins by lowering your cost per sale.
Try selling your customer on the fact that the higher-priced components of the sign will outlast the lower-cost items. Listen to your customers' needs and find out if there are any complementary products your customer can use.
5.Take Cash Discounts from Sign Suppliers
Offering to pay in cash to your sign supplier is a great method to accessing a discount. Money for your sign suppliers today is better than receiving it via spread-out payments. Plus, you could get discounted prices, which will increase your profit margin is more than by trying to delay payments.
Now go sell some signs! Put these tips into practice at your sign company and let us know how your profit margins are affected.