BY ROBIN GHOSH ,
ECONOMIST AND BUSINESS MENTOR
KOLKATA, 26 AUGUST 2024:
For any business enterprise, earning profit is a part of the playbook. But doubling your profit without increasing your sales is a strategic issue, a strategic game, a strategic tactic.
PROFIT DRIVER:
Before we go further, let us identify what are the key profit drivers? Basically, they are :
1 Price Management
2 Expense Management
3 Strategic Sales Management.
PRICE MANAGEMENT:
When we talk about Price Management, what issues should we keep in mind?
1 Your price should reflect the value you deliver.
2 Check your competitor’s price.
3 While deciding the price for your product or service, consider your quality, USP, and what problem you are solving with speed and clarity.
4 If your product has differential power, competition is ineffective. After reaching a critical volume of demand – you can incrementally raise your price so that customers can adjust without feeling bad.
EXPENSE MANAGEMENT:
Coming to expense management, major attention areas are:
1 Reduce waste and optimize operation without degrading product quality or service.
2 Audit your business expenses. Reduce costs without sacrificing quality.
3 Renegotiate contracts with your vendors.
4 Redesign your marketing campaign, if necessary, to reduce your cost.
5 Adopt technology to streamline order acquisition, supply management, and financial management.
STRATEGIC SALES MANAGEMENT:
Now, we come to the most important aspect: strategic sales management. Here, you should:
1 Ensure that you reach your sales target set for the month.
2 Monitor the progress every week.
3 Identify potential issues early on and take informed decisions to stay on track.
Doubling your profit without increasing your sales doesn’t necessarily require underhand or illegal deals or tactics.
Sustainable business requires business integrity. Profit margin is the end result of delivering genuine value to the customers and managing your business effectively.
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