Jonathan houdyschell | How To Increase Your Business Profits

Jon houdyschell | How To Increase Your Business Profits
Jonathan houdyschell | How To Increase Your Business Profits

Jon houdyschell – At some point in running your business, you will think of how to grow your business profits and you really need to plan if you are to do it in a good progressive manner. Whilst the actual way you go about this will vary depending on your business and client profile there are a few considerations below to guide you in your analysis and to try and identify some pitfalls you may come across in the process.

Most people instantly think in order to increase business profits they need to sell more of their goods or services. Whilst this is one option for increased profits it does not necessarily transpire that the profits will increase by increasing your sales. Your costs could increase quicker than the sales because you may need to increase costs such as marketing expenditure, staffing costs or premises costs. You may want to sell more products or services to existing customers for example if you are a bookkeeper do you also offer the service of payroll calculations for your clients. Alternatively, you may look for new customers to increase the size of your customer base possibly by opening another office or shop, advertising for new customers in a new geographic market area.

You may alternatively decide to increase prices, again this would increase profits if all your customers still bought the same goods or services from your business that they would originally have purchased. However, your customers may move their business or reduce the number of goods or services they purchase from you and this could actually lower your profits. In order to analyze if this is an option go back to some competitor research and evaluate what the competition is charging for a similar product or service, look at how your offering varies to the competition and decide if that adds value that can justify higher charges

Reducing business costs is also a viable option, after all, is your sales remain constant or rise and your expenses go down you will find your profit will increase. The consideration I would caution here is if you lower costs to your business will that reduce the quality of goods or services you offer to your customers. If you reduce staffing in your business will that lower service standards or speed of service or do you have slack in your staffing hours that can be reduced. Lower costs for purchased products that you supply such as stock would hep raise profits but if the cheaper products are a lower quality would you lose clients.

There is a fine balance between success and failure in growing your business but if you do all your research in a comprehensive manner and also, more importantly, you monitor the effects of changes very closely as you progress, good bookkeeping records and management accounts will help you monitor the profits. If you notice adverse results then you need to re-evaluate your ideas, they may simply not be working, they may be taking longer to work out than you were expecting or you may have deviated from your plan but this re-evaluation will help you refocus and help get you your desired result to increase your profits.

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