How do I generate more profits per sale?
by Murray Smith | posted on June 6th, 2008 | Strategy, Your Business
The ultimate goal for every business, obviously, is to be successful and make money.
To create that success, there are three crucial questions that every business owner must ask every day. These three questions will help you optimize your business performance and ensure that you are taking the right actions to increase profits and decrease overhead costs.
The first question you should ask yourself is: How do I generate more profits per sale?
It sounds like a simple question, but there are many ways to answer it. When looking at obtaining more profit per sale, we are talking about optimizing each sale. Logically, the more profits you acquire per sale, the higher your revenues will be.
There are numerous ways that you could go about this. You could:
- Raise your prices.
- Decrease your costs.
- Do both of the above.
- Bundle your products, combining separate components, and thereby creating a new composite offering of higher value, which commands a higher price.
- Unbundle your products, so you can charge for each separately, and grow your profits that way.
It all comes down to how much value your place on your products – and there are many ways to do that, so it’s worth thinking about carefully.
In my next post we’ll examine the second of the three crucial questions: How do I get more sales per customer?
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June 9th, 2008 at 10:15 am
Another great way to increase profits is to examine your business practices and bottom line fundamentals for running your company, and make necessary adjustments to boost productivity, transforming your business into a lean, mean, business machine.
You can charge as much as you want for a great product, but how do you put your business in a position to excel?
It starts with the most important components of your business, the human capital. How do you increase worker productivity? You create a culture incorporating laser focus, incentives for success, transparency, and open communication. These three components lead to a dynamic environment, which stimulates your employees, leading to increased productivity and and an efficient business. Once this dynamic culture is created, your profits will surely increase. Its important to note that a culture can’t be created overnight - it’s an organic growth process that begins with the founders.