- Make Money Online
- Internet Marketing
- Affiliate Marketing
- Profit With Networks
- Online Coaching
- Content Marketing
- Work From Home
- Start a Business
- Profit Maximization
Increase Your Profit Margins
One way to make your business more
profitable without going to too much trouble is to reassess your products in
terms of profit margins. It's amazing how many small businesses manage with
tiny profit margins and seem to be permanently offering discounted products and
services -- it makes you wonder how their businesses manage to keep going.
After all, the purpose of being in business is to make money and without a
reasonable level of profit, it is difficult for any business to survive, let
alone build equity value for the future. The bottom line is -- your business
needs to be profitable and a successful business should be making money, so how
do you make sure that your business will bring in a decent profit?
a step back
Sometimes business owners get so bogged
down in the day-to-day running of their business they forget to take a step
back and reassess where they are now and how they want to take their business
forward. Successful entrepreneurs always have an eye on the horizon and a solid
plan for their business.
The first thing to do is to assess how your
budget looks right now. You should be completely objective about this as it
could mean the difference between success and failure. You should make it a
practice to continually check your accounts and produce cash flow forecasts
based on your current level of business. Make sure you are realistic in your
forecasts or you could be setting yourself up for a fall. Check that your
current level of profit is sufficient to meet all your costs, overheads and
financial commitments over the next year or so.
Once you have had a realistic look at the
big picture where your business finances are concerned, you should start
looking at ways of increasing your profits starting by reducing your costs. Are
you spending too much on premises or staff? Is your marketing strategy
genuinely effective and bringing in business, or are you wasting your money on
unnecessary advertising? Do you really need to offer discounted prices? Have
you looked at the prices your competitors are offering to see where you fit
into the marketplace?
Check out how much competition you really
have -- if you are in a cutthroat area of business where there is literally a
price war going on, you may just be better to quit now and find a more
profitable basis of your business with different products and services. You
have to be tough to be able to survive the gorilla tactics of some of your
competitors. The important thing is to take an honest and ruthlessly objective
look at your business -- get professional advice if needs be but if you find
that your business is not producing optimal profits, you are in a great
position to either make the necessary changes to turn things around, or start
again with a different product or a new business. It's better to know where you
stand and pointless flogging a dead horse!
profitable are your products?
It can be a struggle for any business to
survive when they are dealing in profits with tiny profit margins. This can
happen in all sorts of areas but particularly in drop shipping when there are
too many middlemen and even some affiliate products that only provide small
commissions. To make a reasonable profit, you should only be dealing with
highly profitable products, otherwise you need to work on a strategy to sell in
You may as well give your tiny margin
products as freebies or bonuses providing they are cheap for you to buy but
really, you should be looking to sell products with a least a 200 percent markup.
That means if you buy a wholesale product for $20, sell it for $60 and make $40
profit, which equates to a 500 percent markup. Even better, produce a product
for $5, sell it for £105 and make a 2,000 percent markup. It may take some
thinking through but once you find these sorts of products, you'll never want
to bother with paltry profit margins products ever again.
So how can you find products offering these
sorts of amazing profits? Information products such as digital books, reports,
manuals and courses commonly produce these very high profit margins. There are
also plenty of other downloadable products such as software, pictures and so on
that can command high prices for a very small cost. The great thing about
downloadable products is that they provide an item with a high perceived value
that costs very little to produce. They can also be delivered automatically to
your customers 24/7, which saves you a great deal of time and effort.
So try to introduce some highly profitable
products and also look at ways you can provide profitable services as well such
as consultancy. You could also leverage your business to make big profits by
franchising or setting up a chain of businesses which can be managed by other
With a little market research and an honest appraisal of your business, you can start bringing in amazing profits.