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Secrets to Increase Profits in Business

by Olufisayo
Increase Profits in Business

Every organisation is vying to augment their profits by means of augmented sales. However, while working towards this augmentation they are overlooking the fact that the costs incurred are also turning too steep.

Don’t forget that your buying directly impacts your profits. If you yearn to be called as a successful company in the market, you would need to much more than maintaining your supply and focus on increased sales.

Making judicious decisions when it comes to your procurement will eventually help you in increasing your profits procurement management & solutions provision.

Increase Profits in Business

Profit for your business can be enhanced by the simplest techniques you could ever imagine. One of these techniques or strategies of increasing your profits is to spread the profitability awareness among your employees. Ensure all your employees know how important profits are to your business.

Some prominent ways of performance indication are staff costs, gross margin, difference between sales and the forecasts for the same.

Profits can be achieved by giving your business a better exposure. In recent times, the online marketing strategies contribute quite a bit in bringing more customers. Create social media network accounts that would promote your business as well as bring in more customers to you.

Create accounts on prominent social media networks like Facebook, LinkedIn, Google+, and Twitter as well as article ezine sites like Ezine, Reedit, and Stumble Upon etc. which would promote your business by talking about what you deal in and why customers should opt for your company. Social media networks help in interacting with the target audience and informing them about the latest offers and new products and services that you have on offer.

In addition to concentrating on increasing your profits, you must also focus on reducing costs. Negotiation is by far the most sought after method of reducing costs as well as attaining goals related to budgeting.

On the whole, it is a strategic endeavour for keeping you company from spending injudiciously or developing any business relationships without weighing the advantages and disadvantages. It serves as an ideal tool for getting the best deals for your company. In recent times, company owners who choose to focus on prices are considered old fashioned.

However, during this time, they are actually overlooking costs incurred due to other factors. These miscellaneous costs should not be overlooked as they serve as indicators of a competitive supplier.

Other than negotiation, you can also reduce costs by changing suppliers in order to reduce costs. Bear in mind that the new supplier you opt for will not provide consistent quality, good service and even charge a higher price for the commodities he supplies.

To avoid this, you must do some ground work, and check whether the supplier references are genuine and conduct a background check to know the kind of service they have offered to their customers over the years.

Procurement by itself too adds up to the cost to the organisation. Administrative overhead in particular is for the procurement to pay cycle. This comprises of support costs and salaries for the staff dedicated to procurement initiatives, processing of invoice, checking the production and tackling vendor inquiries. If you follow an organized manner, you can do away with a large chunk of these costs.

Here, the procurement staff will perform a greater role by providing support to the business units and ensuring the various procurement cost reduction procurement management & solutions initiatives are followed.

Being a business owner, if you thinking of keeping your tasks in-house and refraining from outsourcing them, always remember that the total value produced by your company must be more than the total costs incurred. This strategy is used by companies to determine which products and services that they provide are actually raking in profits for their company.

You can even scrutinize the total costs incurred to detect which particular tasks are sapping you off your profits. Decreasing costs can bring about more changes to your profitability as compared to boosting your sales.

If you are offering varied products or services, a simple technique can guarantee your profitability on the whole. This technique involves reviewing your profit margins on a regular basis and segregating your products into categories which would further help in procurement management & solutions providing.

The first type would be products that bring about an elevated percentage of sales and higher profit margins. You would need to take special care of this category. The second category would be products offering higher percentage of sales but lower profit margins. For this category, you would need to consider increasing the price and finding ways you can augment your profit margins.

The next two categories are products offering low sales percentage and higher profit margins and products providing low percentage of sales as well as profit margins. In case of the former you would need to boost your sales while in case of the latter you would need to think of doing away with them.

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