Improving Your Profit Margins
One key indicator of a healthy business is your profit margin. This can be accounted both generally and specifically with regard to individual products and services. However no matter how much you may think your business is progressing, if your profit margins are not impressive then you got a problem right there.
Again, you need to be able to determine which products or services are doing well or otherwise. This you do by evaluating individual products profit margins. You need to know which products cover most costs in your business and know how to boost their returns even more. If there are some which are not yielding anything significant, you could find ways to improve them or scrap them off altogether.
In the bid to increase your profit margins, you may get to a point where you need to raise your prices. Well, most businesspeople cringe at the thought of increasing prices for obvious reasons. Every rational customer will look for the sellers who offer more for less. This, therefore, means, stepping up your prices could work against you. However, if you have already created a unique selling position and have also differentiated yourself, then you may take a little courage.
Once your target customers have confidence in your products and services, they will not find it hard to part with extra cash. Simply raising your prices may not be enough if your expenses and operating costs are still on the higher side. See what you can cut down so that you spend less on the various costs and earn more on your sales.
On profit margins, the bottom line is increasing efficiency and effectiveness in all your business systems. Reduce waste, cut down expenses and evaluate the performance of individual products and services so that you can make the right decisions.
As an ActionCOACH and member of the International Coaching Federation, Mark has tools, resources and accreditation’s, which have enabled him1 to transform over 100 businesses and business owners’ lives including achieving an average of 50% growth in both revenue and profitability while creating an improved work life balance. Through our one to one programs I will help you create a plan, actions and time lines and hold you accountable to them, along with helping you to develop the necessary business skills TAKE THE NEXT STEP: For a discovery business assessment, call +61 26362 8970 or email firstname.lastname@example.org.