Any business is looking for customers and more customers means more business. So more business, automatically translates into more profits. It all sounds good but the paper work has to be brought in to practice. Whether it is small business or large ones each one has just one motive and that is to make profits. So how do we increase the profit and that to in a faster way? Well here are a few tips to get you through.
- Under pricing kills profit: It has been seen that smaller business companies have thinner margins of profits as compared to the larger ones. This is simply because they tend to under price the product. So why not raise the price? That is a million dollar question. The reason is that one is scared thinking that the public may think that the product is too costly. Look on the other side of the coin and that is under pricing can reduce the margin of profit. Just imagine we under price a product. The immediate reaction is that the product is cheap. So right from there the profits go out of the window.
- Is the marketing working? We all have learnt that eight per cent of the business comes from twenty per cent of the very good customers and twenty per cent of the business comes from the eight per cent other customers. It all means a bit of planning. One should know that one is losing profits by running all over the country side instead of concentrating on the main market. A little ingenuity is needed to bring in the profits. Before entering the market do a bit of research and find out who is the most potential person that can help. Once that has been decided it is to add that one to the nineteen already selected with the same amount of ingenuity.
- Review the Product Mix: With the market changing rapidly one has to be on one’s toes always. That is why it is important to know what is hot in the market. For those who want to make small profits the best way is to change the product one is selling after a short period of time. The idea is to swim with the flow. One cannot sell lemons when the demand is for apples. A slight adjustment is all that is needed to up the ante as they say.
- Slight cuts on overhead: This is one place where one can be the boss and decide as to what is right and what is wrong. For example one just has a profit of five per cent on a small business one is doing. However if one can cut costs by five per cent then one’s profit is double. Very simple or one can say elementary. On the other hand if one wants to increase the sales up to the same per cent age then one will have to increase the sales by hundred per cent. So one can see that cutting on overheads is much cheaper.