You're in business to make money, so why do you keep sabotaging your profits? While some retail incentives bring people in the door, if sales don't offset the incentive, your small business profits will suffer.

Step 1 Restrict the number of loss leaders you promote in any given period. Balance your promotional loss against the number of people you think will purchase retail items as a result of the promotion. For example, if your offer three radios, valued at $100, at the loss price of $15, you need to sell an additional $245 dollars to offset the loss. Use previous sales numbers to determine what you can spend in order to make a profit.

Step 2 Resist undercutting your competitor's prices when you open your doors. You will draw in initial customers who are "looking for a deal" but the reason they will shop your small retail business is to find cheap merchandise. When you eventually raise your prices, those customers will be long gone.

Step 3 Do one of three things. Provide a better quality product, offer better service, or provide a good (not cheap) value and consistency in your small retail business. Good customer service is a rare but highly appreciated commodity in today's retail world.

Step 4 Reduce low-turnover items and fill your shelves with fast sellers. Some small business retail stores think they must carry a large variety from which their customers can choose. Wrong. They can offer custom ordering services for eccentric items but they should only stock items with a track record of fast sales. There will obviously be some errors as you learn what sells but resist buying the slow sellers.

Step 5 Promote high markup items. Some distributors suggest a retail price that is lower or higher than your typical markup. Choose high markup items to maximize your small business retail store profits.