When it comes to understanding turnover, it can be much easier than understanding profit, with gross and net to contend with. Business turnover is the total revenue generated by a business in a given period, such as a year. It’s an important measure of a business’s financial health and can give you an idea of how well the business is performing and whether it’s growing or shrinking.
Factors that can affect business turnover
There are lots of things that can affect your turnover, from the overall economic climate to the industry you’re in as well as how effective your marketing and sales strategies are. A healthy business typically has a high turnover rate, indicating it’s attracting new customers and retaining existing ones.
A low turnover rate might not necessarily be a red flag, you may have just started out, gone part-time or been on maternity leave for much of the year. But if your business’s turnover rate is declining for no obvious reason, then it’s important to take a closer look at what may be making your turnover take a turn for the worse.
How to improve a business’s turnover rate
There’s no magic wand you can wave to boost your business’s turnover, but are some things you can do to give it the best chance of bouncing back or continuing to grow, including:
- Invest in marketing and sales. A strong marketing and sales strategy helps you reach new customers and generate more revenue.
- Build a strong brand. A strong brand helps you stand out from your competition and attract new customers.
- Provide excellent customer service. Delivering excellent customer service helps you build relationships with customers and keep them coming back for more.
By taking steps to improve the turnover rate, businesses can boost their financial health, and give them the best chance of long-term success.
Extra tips to improve business turnover
Here are a few more top tips for boosting your business’s turnover:
- Focus on your target market. Ask yourself ‘Who are my ideal customers? What do they need or want?’ Then tailor your marketing and sales strategies to reach these customers and show them that your product or service can address their pain points.
- Make it easy for customers to buy from you. This might sound like a strange one but you’d be surprised how many websites make it hard for customers to find what they’re looking for at a few clicks of a button. Make sure your website is simple to use, and the checkout process is streamlined. Offer multiple payment options and make it easy for customers to get in touch if they’ve got a question.
- Provide excellent customer service. Go above and beyond to meet the needs of your customers. Respond to enquiries as swiftly as you can, don’t keep customers waiting as they’ll soon turn to someone else.
- Keep your products and services up-to-date. Stay ahead of the competition by offering new, innovative products and services, and give existing ones a new lease of life.
- Invest in marketing and advertising. Tell people about your business! Some businesses spend 5% on marketing and advertising and others spend 20% and more. If your target market doesn’t know about you, they can’t buy from you. So, invest in marketing and advertising to reach new customers and generate more revenue.
Following these tips could give your businesses a little lift or a big boost and we’re here to help with money matters like tax whenever you need it.
