The amount of profit you make is due to either your success or failure and ultimately fuels the growth of your business, generates a financial support for the owners and provides for the well being of the staff.
To increase your profits you need to determine factors contributing to your gross profit and your overheads. Gross profit requires you to either expand your sales income while controlling your direct costs, or reduce direct costs to increase gross profit.
WH Smith the high street retailer has pleased the financial markets by delivering lower revenue but with a higher margin %. As they say ‘revenue is for vanity, profit is for sanity, and cash is reality’.
To do this you need to ensure the following:
• You know and understand your market/s and your competitors
• You have full product and/or service knowledge and you are technically capable in managing all aspects of the business
• Your service and/or products are of the highest quality, delivered on time and run in accordance with any legislation or other specifications.
• You apply marketing campaigns that are cost-effective but increase your sales. These include in-house promotions, leaflets, press releases and adverts.
Your business overheads also need to be kept under control and requires you to monitor, review and strategise for the following:
• Business Expenses – keep to an absolute minimum, and ensure that any additional overheads you assume result in increased profitability and/or efficiency.
• Increase Overheads – ensure that you have reviewed the market and established where the best place is to purchase your stock. Reliability and costs need to be justified.
• Assets acquired on finance – Review and check your finance options to see if you can getter a better deal elsewhere or reduce your general loan costs
• Reviews – Many businesses could benefit from a regular review of their telephone and insurance costs. Even bank charges can often be reduced through negotiation or review.
• Credit – Regularly monitor your credit account customers to avoid bad debts occurring and find the best credit card deal relating to your business.
Roger T Brown
Consultant
http://www.nuOrder.co.uk
