Small business doesn’t have to mean small profits. The following ten profit improvement tools can serve as a basic financial plan that will help you create profit and reduce loss immediately.

1. Raise your prices 3% today
Always test the limit of your revenue and do not settle for less. If you sell a product for $10.00 and you increase the price by $.30, that profit will go straight to your bottom line and will not be enough of an increase to turn your customers off to your product.

2. Share your profit with your employees by creating a pay for performance plan
Motivate your employees by making their paycheck a direct result of their productivity. Do not put your employees on salary. Instead, reward them with a share in the profits so they notice their paycheck is bigger when they’ve done a good job.

3. Always pay your sales force commission, rather than salary
Encourage your sales force to sell and determine the commission based on work performance. If you guarantee your sales force’s income, you reduce their incentive to sell.

4. Pay commission according to the profitability of the item, rather than the price
Be sure to base the commission on the profitability of the item being sold and not the sales price. The cost of production may reduce your profit margins on certain items and the commission you pay out must reflect this or your are liable to lose money. This will also encourage your sales force to sell the items that make you the most profit.

5. Do not be afraid to accept turnover as a natural way of doing business
Personnel can affect your profit and if employees do not perform, you will not perform. You should try to limit turnover and manage it to ensure you have the best employees, but you cannot be afraid to replace the people who are not performing.

6. Give up golf
Golf is an excuse for goofing off, there are no deals made on the golf course. It is only an excuse to skip work. Instead stay focused on the business and save golf for the weekends.

7. Produce accurate financial statements at least 5 days after the close of the accounting period.
This will allow you to catch problems before they become crises and allow you to better manage your money. Business owners need to know what happens in their business everyday. Flash reports daily can outline the happenings in the key points of the business and help prevent loss.

8. Understand how much each product or service line actually costs.
Don’t sell products that lose money, if it is not profitable get rid of it.

9. Do not use payroll services
The payroll services require that companies pay annual and item transaction fees, taking money out of the business. A payroll service also restricts your cash flow because you must fund the payroll checks a week in advance. There is software available to track and complete payroll in-house.

10. Hire the most qualified person for the job, even if you have family members who would like to be involved in the business
Do not hire family members unless they are qualified for the job. It is very difficult for families to keep the personal stuff at home and only selecting family members means you are selecting from a smaller pool of employees.