There’s no denying that the covid-19 pandemic has been a difficult time for startup enterprises. If the past year or so has proven anything, it’s that the agile organisations are the ones who are set to survive. There are ways you can boost profitability during these uncertain times, and it’s not all about cutting costs, either. By restructuring your business strategy, you can adapt your organisation to the new normal and emerge from the covid crisis more profitable than ever.
Use an FX Broker
The global pandemic means that more business than ever is being carried out digitally, which opens you up to more overseas trade opportunities. However, business owners often overlook the cost of foreign currency exchange (FX), and it really adds up over time.
Processing international payments is pricey; on average, a bank will charge you 3-7% of the transfer volume, seriously eating into your profit margin. Even with companies such as Amazon or PayPal, you can expect to pay 3.5-4% in FX fees per transaction.
Using a business FX broker can save you a significant sum of cash in transaction fees. In addition, they often offer hedging and currency counselling to help you mitigate the risks of fluctuating international currency values. Best of all, they can reduce your international payment fees to less than 1% of the total transfer volume, saving you 33-80% of what you were previously paying. Reliable foreign exchange brokers to use include:
- CMC Markets
- WorldFirst
- MoneyCorp
Tell Your Brand’s Story
Storyteller marketing is a powerful tool that, when done correctly, can help startups build a loyal fanbase. Telling your story will create an emotional connection with your audience. Remember to position your audience at the centre of your brand narrative so that they really feel part of your community.
Brand storytelling isn’t posting a single blog about how you got started. You need to figure out the story you want to tell and then do so through as many different mediums as possible, from Facebook ads to Instagram stories and even the community organisations that you support.
This type of marketing cultivates brand loyalty which helps to increase customer retention. This is great news for your profitability. In fact, a study by the Harvard Business Review found that existing customers are 60-70% more likely to buy than new ones, and spend significantly more – 33%, on average
Get Personal
Customer acquisition is difficult during a pandemic so in order to boost profitability you’re better off focusing on increasing customer retention and customer spending. Whilst many people have been hit hard by the pandemic, that’s not true for everybody. In fact, lockdown has meant that those who have remained employed have accumulated savings. Therefore, you should focus on increasing the price of the average customer order to increase profit.
One effective way to do this is to launch more personalised services. The current climate breeds uncertainty and fear, and thus a personalised service feels much safer and more comfortable. In addition, a personalised service will increase customer satisfaction, thus strengthening your retention rates, too.
Hiring a Quality Accountant
We don’t know exactly what will happen to the economy as the world begins to recover from the pandemic, but it’s certain that big changes are coming in one form or another. The way we shop has changed and so has the way we do business. This will undoubtedly have far-reaching economic consequences for all startups. Furthermore, the economic impact of the pandemic means taxes are likely to rise, presenting a new set of challenges for small business owners.
All of this means that there really has never been a more prudent moment to enlist the help of a quality accountant. Now more than ever, small businesses need the help of a professional to navigate these uncertain financial waters and absorb the impact of these changes. An accountant will be able to help you keep on top of new taxation rules, save you significant money and help you to make smart financial decisions to stay profitable in the face of rapid market shifts.
Summary
By focusing on building brand loyalty through storytelling and personalised service, startups are able to increase their customer retention rates and thus their profitability. Meanwhile, the services of FX brokers and quality accountants can significantly increase profit margins and protect against economic changes. Whilst it’s true that the covid-19 pandemic has presented huge challenges for almost every startup business, making smart decisions now can help your business to increase your profitability and ensure your survival.
