2 ways to increase your profitability in business – cuts costs or increase sales revenue. It’s not as simple as making more sales as generally making more sales leads to an increase in costs. Are you looking to increase the dollar value of monthly sales or increase the profitability margin on your sales?
You can become more profitable without increasing sales if you are not as efficient as you could be. When you start to look at your expenses you will see expenses that you could cut and still function in the same manner. When you start to question your current processes and how you to change things to become more efficient or to eliminate waste you will be surprised on the improvements you can make.
To start take a look at one process or one thing that your business could do without or could do better. Whether it’s cutting time from a process, combining steps in a process, processing multiple items at a time, there is a way to become more efficient. Sometimes hiring a person with a higher level of skill can be brought in and increase the flow and effectiveness of a process.
New employees bring in a new perspective they don’t have the same tunnel vision that you and the present staff do. Because they don’t know “this is the way it’s always be done” new employees inadvertently do things differently – they may have learned a better way at a prior employer. Innovation is the art of making things work better and when the old ways aren’t working being open minded and accepting of new ideas can take your business to a new profitability level. When you successfully find new ways of becoming more efficient these new efficiencies are reflected in your profitability.
Increasing sales generally increases costs because more time must be spent on generating these new sales. Fixed costs like rent do not change with the increase in sales so overall profitability will increase unless new costs like more staff hired is incurred without the increase in sales. Getting existing staff to increase sales revenue without incurring more overhead will incrementally increase sales revenue with few expenses. What will it cost you to get existing staff to work harder to get more sales?
There may be some alternatives or better approaches to the way you make your sales. By taking the time to review your sales approach and your marketing techniques there may be some changes you can make to increase your sales while reducing or maintaining your costs.
How to find new ways to becoming more efficient and better at your sales approach, ask you employees, use the internet to find ideas – blogs, marketing websites, competitors, business associates, books, you will find solutions everywhere all you have to do is ask the questions and look for solutions.