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General Ideas of Increasing Profit


Profit is the desired output of a business organization. It is the final required result. Because every business organization are established to earn profit. Their final goal is to earn maximum profit. Either small or big company all are want to increase their profit maximum. None business entity can exist without earning profit. Because for the smooth operation and expansion of the business profit is essential. It is the practical definition of profit. In the financial language profit is financial reward that the business aim to achieve  for the compensation of risk that they take.


Investopedia explain profit as : “A financial benefit that is realized when the amount of revenue gained from a business activity exceeds the expenses, costs and taxes needed to sustain the activity. Any profit that is gained goes to the business's owners, who may or may not decide to spend it on the business.”


Profit is the financial return or reward that entrepreneurs aim to achieve to reflect the risk that they take.

Given that most entrepreneurs invest in order to make a return, the profit earned by a business can be used to measure the success of that investment.
Profit is also an important signal to other providers of finance to a business.  Banks, suppliers and other lenders are more likely to provide finance to a business that can demonstrate that it makes a profit (or is very likely to do so in the near future) and that it can pay debts as they fall due.
Profit is also an important source of finance for a business.  Profits earned which are kept in the business (i.e. not distributed to the owners via dividends or other payments) are known as retained profits



According to businessdictionary.com- “ The surplus remaining after total costs are deducted from total revenue, and the basis on which tax is computed and dividend is paid. It is the best known measure of success in an enterprise. Profit is reflected in reduction in liabilities, increase in assets, and/or increase in owner’s equity. It furnishes resources for investing in future operations, and its absence may result in the extinction of a company. As an indicator of comparative performance, however, it is less valuable than return on investment(ROI). Also called earnings, gain, or income.


Generally there are two types of profit we can calculate. Gross profit and net profit. There may be other profits like operating prfit… But basic are gross and net profit.


So let’s discussed about how to increase profit of your business. Iam not trying to specify either gross or net profit to increase but iam going to give some simple ideas to increase overall profit of your business.
These ideas are look like simple and not so specific. But if you follow them truly,  you will find significant improvements in your profit.


Simple Ideas

These are simple and old ideas for increasing profit. It may called basic ideas for profit maximization because other new and innovative ideas are based on these ideas. These simple ideas are follows:

Increase sales

Making high profit is all about increasing sales volume. Because all other ideas for profit increasing are based on increasing sales. We adopt various promotional and advertising ideas as new idea of profit maximization. But in depth these all are done for the increasing the sales volume. Because increasing sales also increase your sales revenue which definitely result in the profit maximization.



But it is not so easy to increase your sales volume. If it is easy every business enterprise increase their sales and earn maximum profit. But I am not telling that it is so difficult  to increase sales volume.
Increasing sales is difficult as well easy process. Just you need only is to apply some tricks and ideas which I am telling you here. There may be various ideas to increase sales volume like promotion, advertising, focusing customers, discounts,  schemes etc. which  will be discussed later.

Increase Price

Increasing price for profit maximization is not a great idea but it can as well use. Increasing price means earning extra money from sales which ultimately result in the profit. But increasing profit doesn’t always help for profit maximization. Sometimes it negatively result as sales volume will decrease while increasing price. So there should be reason to increase price. You have to maintain and increase quality of product or have to  add some extra service on your product.

Reduce operating cost

Decreasing cost helps to save extra expenses for your business. Which is profit for you. But it’s not always easy to decrease your operating costs. You have to cut off extra expenses if you want to save some cost and increase your profit. You can reduce extra telephone bill, unnecessary employee expenses, reducing labor expenses by increasing productivity, reduce marketing and utility expenses, reduce travel expenses etc. for saving some money as  profit. This is not a great of increasing profit but can consider as one idea.

Modern Technique

Actually these are not also the new ideas of earning more profit but are hugely and creatively used in these modern days by the business persons. Actually these ideas help to increase sales volume in huge volume but as we know increasing sales volume means also the increasing the  profit. So we can consider these means as increasing profit. These ideas can be describe as follows:

Promotion has great role


Promotion is the most useful idea to increase your sales volume. Promotion helps to aware people about your  products. You have to  hit in the mind of customer that the product means your product which have to use by them. You can use various methods for promotion of your  products. Choosing  appropriate method of promotion is essential but using only one means of promotion is not fruitful at all.

Advertising is essential

Advertise your product in the most appropriate media which suits for you. These media may be one of radios, televisions, newspapers, magazines or internet. Advertising should be in unique way, creative on and a eye-catching. The design of advertisement should be attractive, so that people can easily recognize your product.

Quality brings the customer

Today’s customer’s are quality concerned. They are more alert in quality than price. Customers can give more value for quality goods. So you can increase your sales volume in definite amount by giving more important in quality. You can apply the rule that provide quality products than competitor and stole their customer along with increasing new customers. Quality must include total quality. Along with outer quality, design, inner strength, productive, sustainability, service warranty etc.

Power of social media


You may heard about the power of social media. This is the big platform in these days to inform people about your product. Use social medias like facebook, twitter, google plus, linked in etc for the purpose of promoting your business. Use new ideas for giving information about your product. New means attractive and creative ideas. 

Writing blog can be helpful


In this age maximum people have the access of internet and most of them use online business service. So they use internet and search the product of their requirement. Writing a blog or creating a website is another great idea for promoting your business. You can add information about your product in the blog or website. So that the customer can find the product of their requirement easily. Which will help to grow your business and ultimately help to increase your profit.

Customers want to be focused

There are thousands of business are currently performing like yours. That means you have to compete other thousands business. That’s why customers are want to be focused. If you do not focus them others will do. Focusing customer is not a new idea but you have to focus them. Because customer are your god, and your sales can only increase if customers love your product. So you have to know the requirement and desire of your customer and provide service like this.

Always hunt for new customers

Growing business is not possible without the new customers. With the old customers you have to only satisfy in your current profit. If you want to increase profit you should have to find new marketplace and new customers.

There is always challenge for the business to stop their customer from diverting other products. But to be a successful businessperson and earn maximum profit it is essential to increase market coverage by  finding new customers along with stopping them to from diverting towards the other product and services.

Customer services

The customers of the age are so alert and so knowledgeable. The are well known about the services provided by other competitors for same product and services. They are alert about the service before sales and after sales. Customer service is the means of making customers fully satisfied. And a fully satisfied customer can bring other customer so such customer is considered as a gold egg for the business. 

A sale is the first step to increasing your sales, not the last. Providing good after-sales service shows your customers you want to build a long-term relationship with them, earn their loyalty and keep their business. 

The aspect good service before sales, during sales and after sales. Showing good attention, asking their requirement, constant follow up after sales, warranty, repair and maintenance listening the feed back are the means of customer service.

Design matters most


Today’s customers wants attraction. More than the quality customers are desired to purchase a attractive product. This doesn’t meant that they don’t care about quality but I only said that today’s customers are more design concern. So the design of the product and marketplace such as shopping complex, supermarkets, departmental stores, online stores (if business is related with e-business) should have attractive design  and eye-catching layout. So that customers can easily differentiate and focus your product and marketplace than other’s product.

Customer wants change

Customers may become bored from the same old product, same old design, same quality, same outlet, same service and many more same. So they want change after sometime. The change may be in form of product quality or design or marketplace or in form of some facilities. By providing changes to the customers you can definitely increase your sales volume and your profit as well.

Discount, Prize and Schemes are beneficial

Giving discounts to the customers may in the form of cash or in the form of goods and services can increase the sales volume in most of the cases. Giving % discounts by increasing  % price doesn’t affect your business but it definitely affect positively in the customers mind. 

This bust the concept of customers that they have buying the product and services in less than ten percent of the original value. So you can give  10 percent discounts by increasing 5 percent price, so that customers can feel they are achieving benefits from discounts and you can also receive huge profit as well can recover the loss of giving discounts from the revenue generate by increase in sales volume from this discount.

Likewise giving some prize and some special schemes in the special occasion like new year, Christmas etc. something like buy one get one free, some special prize for the purchase of huge volume etc. prizes or schemes may have the positive impacts on customers so the sales volume can increase.

Conclusion

You definitely can increase your business profit but you have to focus yourself. There may be thousands of ideas but no one are new. Only new is your thought, your style of working, and success of generating profit depends upon how you apply these ideas in your way?

Never think about other’s style and ideas but apply your ideas in your way and think how uniquely can you promote and increase your business. Or try to find the solution how the customers can be satisfied from your  business.


So don’t be panic about the old rules and ideas. Because your success of generating profit depends upon how uniquely or creatively you can apply these rules in your way.

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