Increase My Business Profit
You have a business which fulfills the dream of being your own boss. You have a passion that fuels the creativity behind your product(s) or service(s) that you provide. You love what you do, a fact that alludes many. However, there is one huge problem. You aren’t making a profit in your business. You won’t be in business long if it does not start to provide a profit.
There are two ways to increase profit in your business. You can either increase profits or decrease costs. Increasing profits requires either selling more of the product(s) or service(s) you provide currently. You also can develop new streams of income such as creating a new product or offering a new type of service. Of course, this needs to align with your brand and your passion.
The easier and more immediate change option is a reduction in costs. This requires you to understand what costs there are in your business. Listed below are some questions to help you understand what your costs are and how to reduce them:
Are you tracking the costs in your business? Do you understand your business costs? Reports from your financial system describing costs such as a profit and loss report, should be looked at in detail. Working with an accountant is essential in understanding the costs in your business. These steps are vital in being able to make quick and smart decisions to avoid greater issues later in your business.
What does it cost to create your product or service? Figure out exactly what costs are involved when you create your offering in your business. Could it be made for less without compromising quality?
Can you negotiate with vendors for a discount or decrease in pricing even for the short-term? Vendors value their customers and some are willing to work with you for a return in the future.
What costs are involved in running the business? Are there indirect costs that can be reduced. Indirect costs are costs that are not directly related to the product/service provided in the business. Expenses such as meals, travel, utilities are all expenses that can be looked at and possibly reduced.
Are there any systems that need to be paid for but are not being used or can be replaced? A system that cost less or the system isn’t needed at all would reduce costs.