Small businesses play a vital role in the UK economy, with over five million currently operating in the country. These businesses are the foundation of local communities and contribute significantly to job creation and economic growth. However, running a small brick-and-mortar business in the UK can be challenging, particularly in today’s increasingly digital world. This is because many smaller physical businesses rely on manual or legacy processing systems.
As such, no matter whether you own a retail store or a restaurant this article will explore some practical ways for small brick-and-mortar businesses in the UK to increase their profits and succeed:
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Optimise your pricing strategy
Rising costs in the UK are a significant barrier to growth for small businesses. For instance, Cambridgeshire chip shop owner Mark Petrou laments that rising fuel bills prevent him from earning a considerable profit while maintaining affordable prices. Consequently, the key solution to staying afloat in this economy is to make sure your prices are competitive by reflecting the value of your products or services.
There are several critical aspects to achieving this—researching your competitors, considering your target market, and testing different pricing strategies. For example, a boutique clothing store that targets young professionals can regularly conduct market research to understand their competitors’ pricing and adjust their prices accordingly. They can also use dynamic pricing where they change prices based on demand and seasonality. This can be rolled out by increasing prices on popular items during peak shopping seasons and offering discounts on less popular items during slower seasons. Finally, they can offer promotions such as buy one get one for 50% off to entice customers to shop more. Through such pricing strategies, you will be able to make your profit without negatively affecting your patron’s loyalty or brand perception.
Accept a variety of payment options
Cash transactions have been decreasing in the UK in recent years as more and more consumers turn to digital forms of payment. In fact, cash payments accounted for only 21% of all transactions in the country in recent years.
By accepting various payment options (including contactless, credit and debit card, and mobile payments), you can accommodate the payment preferences of all customers. Modern card payment machines provide customers with a convenient and secure way to make purchases. Since they’re portable, they enable you to take payments at the till or around the shop floor, depending on the kind of service you provide. Additionally, applying for these payment platforms is relatively easy regardless of the size of the business. Often, small brick-and-mortar businesses need only apply online or via a no-obligation sales call. With a payment solution like this, you can seamlessly increase your profits and consumer base as you keep up with the cashless payments trend.
Utilise online marketing for your brick-and-mortar business
To stand out in a highly competitive market, small brick-and-mortar businesses in the UK need to utilise online marketing effectively. After all, over a billion people worldwide are expected to shop online in 2023. Aside from this, a 2021 survey found that 90% of Brits research online prior to making a purchase. Online marketing benefits small brick-and-mortar stores by expanding their potential customer base. This can be done by increasing your digital presence. Our guide to forming a digital marketing plan outlines how brands can make use of SEO to ensure their website ranks higher on Google.
And with potential customers actively searching for the items or services your organisation provides, you will increase the chance that they will visit your store. Furthermore, platforms such as Facebook and Instagram allow small businesses to quickly create ads that will show up on search engines. They even provide access to analytics tools that will tell you how many people see and click through the ads. This information can help determine whether or not the advertising strategy is working so that necessary changes can be made with minimal fuss or expense.
Partner with other small businesses
Small businesses are the backbone of the UK economy, accounting for 99.2% of all businesses in the country and employing over 16 million people. However, they often face challenges such as limited resources and competition from larger companies. By working together, small businesses can uplift and support each other to expand their market and reach profit targets.
One example of successful small business partnerships in the UK is “Independent Retailer Month,” celebrated every July. Although shopping locally is encouraged all year round, July is reserved explicitly to celebrate small businesses and highlight their contributions to the economy. During this month, small independent retailers from various cities across the UK come together through community events and farmers’ markets to showcase their unique products and services and raise awareness about the importance of supporting small businesses. Partnerships like this help increase their footfall and sales by attracting customers who might not have otherwise considered visiting their shops.
Focus on retaining customers
When you’re a small business in the UK, building a solid reputation within your local community is an important investment. With this, you can rely on your customers’ loyalty and interest. Fortunately, brick-and-mortar stores are uniquely positioned to build strong relationships with their customers. This is because they have the opportunity to meet customers face-to-face, and they can build trust by providing excellent and personalised service.
One effective strategy for retaining customers is to create a loyalty programme. Case in point, marketing firm Cardyltics noted that in the UK, stores with successful loyalty programmes can expect 70% of sales from just 30% of loyal customers. If possible, it’s advisable to partner with an established brand to create a loyalty program. A recent example of this was the partnership between Local Blend (powered by Coffee Club) and Vodafone customers. Using the VeryMe Rewards app customers got a 25% discount at certain independent coffee shops. These incentives encourage customers to return to your store, which can help build a strong customer relationship.
By taking a smart approach to running your business, small brick-and-mortar business owners can increase profits and ensure the long-term success of their establishment. Over time, with the right strategies and mindset, small business owners can also play a vital role in supporting the UK economy.
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