One of the most important questions from employers is: “How profitable am I?” From there, business owners can also ask: “How can I be more profitable?”
Full-time business owners often work more than full-time traditional work weeks. They can also take their work home. They can think up their actions, live and breathe. Of course you want to know how well your company is performing financially. It is also normal that you want to receive good money for your business initiative.
Ideally, your company should increase its profitability from one week to the next, from month to month, from quarter to quarter and from year to year. However, if your company is in the periodic industry, you may notice that the courses with industrial experience also experience your company.
This article helps you answer how profitable your business is and how you can increase your profitability.
Q1: How much profit am I?
Depending on how much time you have spent managing your business, you can check your financial records in a weekly, monthly, quarterly or annual form.
Regardless of your analysis period, you must consider two sets of numbers from your company during the analysis period: income (revenue) and the costs of your business during the same analysis period. After deducting your expenses, your income reflects your income in the same period.
When the income is higher than the expenses, your company is profitable. When your income is equal to your expenses, your business will be cured. Finally, if your income is lower than your expenses, your company loses money.
Question 2: How can I be more profitable?
While the first question concentrates on the past, the other focuses on the future of the work.
There are three weapons that can be used to increase profitability in the future.
The first lever you can use to increase profitability is the selling price of goods and services. By increasing your sales price and maintaining all other business factors in the future, you automatically increase profitability in the future.
When you think about how quickly your products and services can grow without reducing sales, you need to know how customers want to pay for the value addition of their products and services. If you are focused on the costs of your customers, you will be given less room to increase your sales price, whether it is a focus on the quality of goods and services that customers receive.
The second advantage that you can achieve in order to increase profits is to increase the number of goods or services sold. To sell more goods or services, you need to reach new customers or increase your existing customer service rates. In the first place, there are more marketing initiatives to reach new customers, while later more and more marketing initiatives can be taken up with existing customers.