You might be wondering, how do I maximize the profits?
There are many different ways to increase your profits; some critical decisions will need to be made first. Understand that this is no an overnight exercise if embarked on – gradual changes need to be made if you want a sustainable business. But it will be worth it! Deciding to increase your business profits is the beginning of a huge commitment.
Regardless of the nature of your business, the logic is still the same – increase sales and reduce the cost of sales. It seems simple enough but requires far more investigation and thought.
This article will provide a few tips on how to maximize profits for your corporation.
Common ways to increase sales include:
1) Investigate your product offerings
Ensuring that you are selling the right products that sell is essential. There is no point in having your money tied up in stock that doesn’t sell, right? What can you do to move old or unselling stock?
2) Reassess your target market
Do you need to make some adjustments to the customer base you are selling to? Are they the right fit for your products? This exercise aims to make sure that the products or services sold in your business are suitable for your customers.
3) Are you placing your product in front of the correct audience?
How are you advertising your business? There are many ways to promoting your business to achieve organic growth – free! Did you know that affiliate marketing is also low-cost? Marketing and advertising is a crucial step and cannot be poorly executed. This can become a costly exercise if not well thought out and can result in wastage! What has worked for you in the past? Can you do more of that more effectively?
4) Pricing at the best points
Pricing, pricing, pricing! It doesn’t matter how good your advertising is to the right customer; if your pricing points are out, customers will find it cheaper elsewhere. Remember, the vast access to a global market will result in no customer loyalty! Don’t undersell your value either – you cant give away your products, but keep an eye on what other products of a similar or substitue nature are regularly selling! Your pricing could be the thing standing between your profit and loss!
Reducing your cost of sales:
With a bit of effort and creativity, you can start reducing your costs
1) What can be outsourced in your business?
Take your list of cost-of-sales and expenses in your business – start with your non-negotiable costs and assess what you don’t need to do yourself. When you have an idea of what can be done better, faster, and cheaper – you can focus on where other opportunities may be.
2) Can you sell off assets and lease instead?
This may not always be possible, taking into consideration depreciation. However, there may be an opportunity for you to look into this. The recovery of cash vs. the cost of leasing an asset, i.e., machinery, may present some value.
3) Can you find cheaper suppliers?
Consider your options. Like your customers will always look for the same price cheaper, you should always look for suppliers that offer the same/better or substitute goods at a better cost. Some suppliers may provide you with better payment terms if the price of the product is not negotiable.
4) Where is there wastage in your business that can be reduced or eradicated?
By reorganizing your business, your day-to-day operations can become more effective and efficient. This can make your business more sustainable and set you up to grow and maximize your profits in the long run. The challenge for most entrepreneurs is to ensure that when the business grows after these changes, costs must still be contained, but not to the extent where quality is compromised!
You may find that there is a combination of factors you need to adjust concurrently, do so at your discretion without impacting the operational activity of your corporation. If this sounds daunting to you, not to worry, start your business with B.E.T.
B.E.T is the digital business manager and mentor you need to support you to maximize profits in your corporation.