SIMPLE RULES
FOR MAKING YOUR BUSINESS PROFITABLE
Advice on making an enterprise profitable could
be given under two main headings:
1. Keeping Costs
Minimal.
-
Drop products that always make losses.
-
Do not increase your staff unless it cannot be avoided. Remember,
it is easier to avoid employing than to send employees home (declaring them
redundant).
-
Introduce a performance-based salary rise system if you do not
already have it.
-
Get better deals from suppliers, buyers and intermediaries (supporters
of the business environment such as insurance companies, brokers, consultants
and bankers).
-
Use home space instead of renting dedicated offices. If you have
to go the lease way, ensure there is no space in the offices or yard that you
do not immediately need. The property
owner takes every square inch into consideration when fixing how much you have
to pay.
-
Deal in products that allow a bigger profit margin, or sell fast.
-
Improve efficiency. That is, producing more with less, or more
with the same amount of investment.
-
Look around you some more,
and see if there are other unnecessary costs your business is bearing: limit
office decorations to what just makes it a pleasant place to operate in; can
the business support a vehicle with the engine sizes you have in your fleet?
2. Increasing
Sales.
-
Improve your offer. This is sometimes a short term cost but long-term
gain. Areas of improvement are diverse and depend on the product type. In the
case of a bathing soap, for example, spheres of attention could include shape, scent
and size.
-
Widen product range. This gives you more sources of profit.
-
Capture new customers. Yes, it does mean more sources of purchases
– another way of saying more profit.
3.
Increasing Price.
Perhaps the
most direct and obvious avenue of making a business more gainful is increasing
product price. It has, however, to take into account issues like competitor
pricing and ability of the market to pay.
Conclusion
Rupert Chimfwembe
18 May 2018
