5 Easy Steps To Double Your Profits
As a company owner or an Entrepreneur, don’t you wish you earned more money from your business? It’s a good possibility that many SMEs under perform compared to their true money making potential. This generally occurs because business owners are usually focused on a particular pain point rather than a 360 degree evaluation of effectiveness. Rendering professional services for over 60 years, our initiative focuses on the real cost control that comes from unnecessary process steps, rework, and management tampering. Lets review some of the salient points a business owner needs to keep in mind:
1. Profit Leakage
Identifying profit leaks is the first step to understand where the money is draining from. The most common mistake a business owner makes is to be close minded about outsourcing key functions. But perhaps, it is this practice of outsourcing a Finance function or HR function, that will plug the profit leakage / drainage in the long run. After working with and helping 500+ clients, we can safely say that having certain functions in-house may be one of the biggest areas that can expose a SME to profit leakage / drainage.
While many SMEs shy away from using technology, and substitute it with man power, they are just setting themselves up for a setback. Efficiency is the key for a company to grow and streamline their business plans, and by using the latest technology, an SME can become more competitive in terms of quality, design and cost. A business owner can also use technology to effectively and efficiently control his business. Today, SMEs can avail non-collateral loans aimed specifically for technology upgrade from their existing bankers under various schemes.
Lead generation, Lead conversion, Number of transactions and Size of transactions have a direct impact on earning profits. You should be continuously looking for ways to up-sell and cross-sell to each customer each time. Lowering cost of customer acquisition and increasing customer referral are transactions that can be continuously monitored through appropriate checkpoints.
4. Profit margin per sale
Profit Margins are the gross profit that you make from the sale of each product or service. By continuously seeking ways to raise the price or to lower the cost of the product or service without decreasing the quality, you can increase profits per sale. Every dollar by which you raise the price, it flows straight to the bottom line as profit, if you keep costs constant. Every dollar by which you reduce expenses, also goes straight to the bottom line as profit, if you hold sales and revenues constant. Further, reducing your break-even point is another angle to attain a higher profit margin per sale. You should use the break-even point to evaluate the potential effectiveness of any advertising or any other expense that you incur to increase sales. Every expense to increase profits must be seen as an investment with an expected rate of return that is greater than the cost.
5. Raise your prices
In many situations, you can raise your prices by 10 or 20 percent without experiencing any market resistance. For good quality products and highly professional services which result in customer delight, a small increase in your overall prices will not drive your customers away.
PeriGrow works in conjunction with various SMEs in the real estate, family business, retail, manufacturing, financial services, media & entertainment, internet-led business sectors. For those SMEs who are looking for expert direction and guidance in improving their profits, a consultation is the first step. A consultation can be arranged by contacting PeriGrow via email: firstname.lastname@example.org or phone: +91 22 6117 4910.