Three Ways To Increase Earnings This Summer

Forbes

4 hours ago

Despite Tariff and Tax Concerns, Small Business Were Able to Increase Earnings in May for Fifth Straight Month, and More Can Be Done
WASHINGTON, DC - U.S. President Donald Trump gestures while speaking during his "Liberation Day ... More announcement in the Rose Garden at the White House on April 2, 2025. (Photo by)
Small businesses grew earnings in May despite uptick in expenses, tariff uncertainty, and concerns about taxes. Despite fears of small business owners following President Trump's 'Liberation Day' on April 2, when many expressed concern that the president's tariffs on foreign-made goods would send inflation soaring, it has yet to materialize at this point.
While inflation is still above the Federal Reserve's target rate of 2%, many business owners are more profitable than they had predicted. However, Fed Chair Jerome Powell warned earlier in June that we may not have felt the full impact of higher tariffs yet, since goods sold in the early part of the year might have been imported into the country before the tariffs took effect.
Related: Fed Holds Interest Rates Steady, But Signals Cuts May Happen This Year
In general, as the weather has gotten hotter, the economy has also heated up, too. Biz2Credit's monthly Small Business Earnings Report, which tracks monthly revenues, expenses, and earnings, found that average earnings rose to $49,300 in May 2025, up slightly from April's number. This continues a positive run for earnings, rising 53% since January. Some key findings:
With the summer months now upon us and inflation seemingly tempered, small businesses are seeing growth in top line revenue, expenses, and earnings. The positive marks for enterprise operators echo the sentiment in the U.S. Small Business Confidence Index, conducted by the NFIB. The confidence index rose for the first time since December 2024, and the net percentage of owners expecting better business conditions rose 10 points from April to 25%.
Summer worker serving an ice cream to a customer at an ice cream shop.
Ways Small Businesses Can Increase Their Earnings This Summer
Entrepreneurs know that running a business involves a lot of juggling. Business owners have to worry about operations, fulfillment, customer service, accounting and finances, and marketing. Boosting revenues doesn't always require ramping up every aspect of your company at the same time. That can inevitably lead to burnout. Rather, it often means focusing on the activities that have the greatest potential to produce the best financial return.
Here are three smart approaches to increase earnings this summer:
For a majority of businesses, 80% of your income comes from just 20% of your customers. Not all customers contribute equally to a business' revenue, and high-value oness deserve the most attention. Research from Salesforce shows that when businesses segment and focus on their top clients, they can increase their success dramatically. The 80/20 is as relevant today as ever. The question is what to do about it?
According the Harvard Business Review, acquiring a new customer can cost 5–25x more than retaining an existing one. Instead of chasing new buyers, leverage your existing customer base. already have. Nicole E. Beard of BigCommerce reports that techniques like upselling (pushing premium versions of successful offerings) and cross‑selling (putting emphasis on complementary items) can boost revenue by about 42%, while increasing a customer's lifetime value by 20–40%. Additionally, selling to existing customers has a 60–70% success rate, vs. only 5–20% with new prospects.
Companies can also keep existing customers happy through the use of loyalty and referral programs. These programs don't just make customers feel appreciated—they boost revenue, too. According to a Bond Brand Loyalty study, 79% of consumers say loyalty programs make them more likely to recommend brands with 85% being more likely to continue purchasing from a brand. Meanwhile, Wharton Business School research shows referred customers are 16% more profitable, regardless of demographic or time of purchase.
Adding more products or services doesn't always lead to more profit. In fact, the opposite can occur. Offering too many options can overwhelm customers, create decision fatigue, and dilute your core value proposition.
If you have been steadily increasing your offerings but have not experienced a corresponding increase in earnings, consider eliminating low-performing or low-margin products to simplify operations. This streamlines inventory, improves marketing focus, and frees up time and resources to scale what's already working.
Trimming even modest costs can produce a significant increase in margins. Many small businesses waste money on unused subscriptions and redundant/ineffective marketing.
Eliminate unused subscriptions
Typically, the largest expense for any business is labor. Employee wages, benefits, and taxes account for 70% of total business costs. Be sure to manage your staff properly, especially in the summer months. If need be, you can look to trim the hours of less productive workers or even cut them entirely, they don't seem to be contributing to your bottom line. At a time of labor shortages, you may not be able to cut hourly wages of those who are less productive, but you can trim the hours of those whom you find to be the least productive.
Relateed: 5 Ways Small Businesses Can Increase Earnings With Spring Cleaning
We all know that there are only 24 hours in a day, so it's best to maximize your time and the time of your staff as much as possible. Your time is just as valuable your money, and every hour spent on routine tasks like invoicing, social media posting, or scheduling is time not spent on strategic growth.
Use technology to automate routine tasks. For instance, QuickBooks can automate administrative processes, such as invoicing and generating payments. Tools like Calendly can eliminate email back-and-forth when trying to schedule meetings. A study by McKinsey & Company found that businesses that are able to successfully implement automation and can experience a 20-35% increase in productivity by saving employees roughly 240 hours per year and employers roughly 360 hours per year, while increasing sales by 14.5%.
Online banking, including automatic bill pay, helps make businesses more efficient. Setting up payments online in advance eliminates late payments that can result in fines and penalties, and cuts the cost of paper expenses, including checks, envelopes, and postage.
A businessman using laptop for online banking, payments, shopping. and financial transactions.
Digitization has revolutionized the way that small businesses secure capital. Gone are the days when owners had to walk into a bank during working hours, meet with a loan officer in person, fill out redundant paperwork and provide copies of bank statements and other financial documents. With the development of financial technology (fintech), small business borrowers can apply for small business loans at any time, including nights and weekends. Documents can be loaded onto a potential funder's platform, which increases the speed of the process. Additionally, advanced data analytics can help borrowers make better informed decisions while approving loan applications.
Summer Has Great Potential to Increase Earnings
Profitability isn't about pushing harder; it's about working strategically. From increasing retention and refining your offers to automating operations and leveraging your top customers, there are many ways to grow your bottom line without scaling your stress.
Start small. Trim one expense, launch one referral bonus, automate one task. Then track your results. Over time, these smart, sustainable shifts can turn a modest operation into a highly profitable one. By following these tips, business owners can increase earnings can rise as summer temperatures hit their heights.