The Power of the Profit Margin: Take a Look at What is Costing Your Small Business

It’s the question asked in any assessment of your business and plays a big role in the outcome of your business and in all the helping steps beforehand:  Your profit margin indicates just how viable your business will be in the long run, and how much it can be relied upon to succeed early on.

Tips for Improving Your Profit Margin:

  • Decrease Material Cost: Shop around to find the best places to buy materials or discuss ways to lower prices with your suppliers.  Also, you can often find the same quality for less by buying in larger quantities.
  • Cut the Fat: Once you have found all the lowest prices for quality products, look at the way the business works.  Consider telecommuting instead of excessive travel, or do an energy audit to lower your electricity bill.  Running a business costs money, but there are always ways to improve how effective the money you spend is.
  • Utilize Social Media: Social media marketing is perhaps one of the most powerful tools for promoting your small business in the modern world.  From search engine optimization to shout-outs on social media sites, the internet is ready and waiting to catch on to the next new thing.  Rather than spend thousands on marketing campaigns that can have varying success rates, utilize the power of social media with the help of an attuned expert or two.
  • Careful Hiring:  Small businesses are defined by the U.S. Small Business Administration’s Office of Advocacy as those employing less than 500 people, but maybe you can manage with even fewer.  Consider taking on part time employees or using limited time independent contractors to take care of some of your singular projects.
  • Efficient Apparatuses: Choosing your equipment carefully can help you be successful in the long run.  Improving efficiency will make your output more efficient overall and will be a worthwhile investment.  You can even utilize commercial equipment financing to minimize your cost up front.


Any way you can improve your profit margin can go far to increase your working capital, the amount of money not tied up in material and infrastructure that you have available to spend on your business.


One Step Further


When you need that extra help, Advance Funds Network seeks to help small businesses make their dreams a reality.  We have spent years giving small businesses credit lines and providing assistance such as commercial equipment financing.  Advance Funds Network offers many different types of unsecured funding to help your business achieve exactly what you have set out to do.  With our extensive experience and resources, we can be just the backer you need.


It’s more than just selling your product for more than it costs to make it.  Carefully monitoring your business to maintain a good profit margin will allow you even more competitive power in the market and strengthen the heart of your business plan, which should always center on staying in the black.  Think outside the box and look for new ways to do that.

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