There is a common fallacy that perpetuates itself among small business owners who believe that they only way to substantially boost their profits is by increasing sales.
While increased sales certainly compose the goals and accomplishments of every successful business, for small business owners especially the reliance upon increased sales to generate more profits can not only be faulty logic but likewise an outright a business killer.
Fred wasn't afraid of getting training from the best. He went off to the Marine Corps in order to understand some of the best delivery procedures in the world. Everything he did was with that vision of an eventual overnight commercial delivery service to the world. He knew it was possible and he wasn't going to let anyone tell him he wasn't. When you are getting trained though, it takes patience and persistence in order to get to you end-all goal.
Even when Fred created FedEx created his overnight delivery service, he wasn't all of the sudden just satisfied. He continued to progress by improving management in the company. He did hundreds of small innovations in order to keep the company on top.
His influence, through partnerships with manufacturers, allowed him to not only increase the efficiency of those manufacturers, but also virtually decide on the prices for products he purchased himself. His overwhelming power made him a business leader, and allowed him to be as successful as he was both in life, and in the legacy of his company.
The first step is to truly understand what one's gross profit margins are, or how much money is being brought in on every sale. Calculating all the expenses with the total cost of each service or product offered will give an accurate calculation of one's gross profit margin; but such costs as overhead and employee costs do not figure into the profit margin so exclude these and similar expenses for now as the goal is to increase the profit margin itself and not a total balancing of the bookkeeping.
After a clear picture of the businesses profit margins has been established, an owner should analyze the profit margins for each of their products or services. As this happens, it is possible that the owner will discover that they may have products or services that garner little by way of total profit while others excel; at which point the owner can make the decision to cut the low profit products or services to focus resources on their products or services that actually make them money.
Another step to increase profit margins that may be difficult for some small business owners to initiate is to increase the prices on products or services.
Whatever level of management or business you are at, make sure you apply some of these great skills that Fred had. You will be sure to see a huge amount of growth and unity. Most of all, you will see your employees take on challenges in a much more innovative way.
While increased sales certainly compose the goals and accomplishments of every successful business, for small business owners especially the reliance upon increased sales to generate more profits can not only be faulty logic but likewise an outright a business killer.
Fred wasn't afraid of getting training from the best. He went off to the Marine Corps in order to understand some of the best delivery procedures in the world. Everything he did was with that vision of an eventual overnight commercial delivery service to the world. He knew it was possible and he wasn't going to let anyone tell him he wasn't. When you are getting trained though, it takes patience and persistence in order to get to you end-all goal.
Even when Fred created FedEx created his overnight delivery service, he wasn't all of the sudden just satisfied. He continued to progress by improving management in the company. He did hundreds of small innovations in order to keep the company on top.
His influence, through partnerships with manufacturers, allowed him to not only increase the efficiency of those manufacturers, but also virtually decide on the prices for products he purchased himself. His overwhelming power made him a business leader, and allowed him to be as successful as he was both in life, and in the legacy of his company.
The first step is to truly understand what one's gross profit margins are, or how much money is being brought in on every sale. Calculating all the expenses with the total cost of each service or product offered will give an accurate calculation of one's gross profit margin; but such costs as overhead and employee costs do not figure into the profit margin so exclude these and similar expenses for now as the goal is to increase the profit margin itself and not a total balancing of the bookkeeping.
After a clear picture of the businesses profit margins has been established, an owner should analyze the profit margins for each of their products or services. As this happens, it is possible that the owner will discover that they may have products or services that garner little by way of total profit while others excel; at which point the owner can make the decision to cut the low profit products or services to focus resources on their products or services that actually make them money.
Another step to increase profit margins that may be difficult for some small business owners to initiate is to increase the prices on products or services.
Whatever level of management or business you are at, make sure you apply some of these great skills that Fred had. You will be sure to see a huge amount of growth and unity. Most of all, you will see your employees take on challenges in a much more innovative way.
About the Author:
Success in today's business world means having a broad knowledge of marketing, management, finance, real estate, and more. These accounting and Human Resources programs will give you just that-an education that is relevant to the core competencies you will need to take advantage of and advance through a wide variety of business opportunities.
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