It’s never too early to start preparing for next year’s business growth, especially during tough economical times. With proper planning and evaluation of last year’s figures, you can take the steps needed to keep your business running smoothly while increasing profits. The following questions will help you plan the necessary steps to ensure that your business will prosper in the upcoming years.
• How many customers do you need to break even? Once you determine how many customers you need to break even, you need to determine how many customers you need to make a profit.
• Do you have a plan that will generate consistent sales and profits?
• How many customers do you need to walk in the door to make your profits?
• What is your profit goal?
If you answer these questions and use your answers as a guideline to prepare a plan to increase profits, you will be able to compete with most competitors, as most successful businesses know their business inside and out and are very profitable as a result. Most business owners, who do not produce profits, do not know the answers to these questions, and as a result they are unable to develop a plan and this is why they are unprofitable.
Here are some things to consider when making a plan:
1. Learn what your numbers are by determining what your sales are, how much money you are working with and how much of that money is profit.
2. Determine what products are best sellers and then determine if you can increase the price slightly to increase the profit margin, without, deterring consumers from purchasing this product. Most customers won’t even realize that the price increased, as long as the increase is not more that 10 percent.
Know Your Business
Don’t be a stranger to your business. Spend time with your customers and learn what it is that they are looking for with their purchases. Keep track of how many customers walk through your door each day and how many of them make a purchase. After you have determined this, you need to figure out two things. First, why did customers leave the store without making a purchase? Secondly, determine what you can do to increase the sales of customers who enter the store. Maybe you can provide more associates on the floor to help customers and make sure that every associate is knowledgeable of the products that you are selling. In order to know how many associates are needed, you need to know how many customers enter the store daily.
Determine what percentages of people who enter your store are profitable. After you determine this you need to determine how much profit they each bring in, and what your profit goal is. How many customers do you need to come into your store to reach this goal? Once you determine this, you need to devise a plan that will attract customers to enter your store.
Determine A Plan That Will Get Your Profits To Meet Your Profit Goal
Example: If you charge by the hour and you need to increase your profit, you need to make a plan that will meet this need. If you want to double your income, you can do this by either doubling your hours worked and charging the same, or by increasing your fee per hour. After you determine your fee, you need to make sure that your products or services are worth the rate that you have set to charge your customer. Once you have the products or services, you need to market them with customers who are willing to pay your prices.
Know Your Competition
If you are having trouble getting customers to pay your fee than you might need to take another look at your products and services. Consider adding a product or service that is unique to your line of business. Keep your competitor in mind when doing so. What can you offer that your competitor does not?
If you want to avoid bankruptcy than you need to know your business and knowing your business requires you to know your numbers. You must develop a plan and execute it in order to profit and be successful.
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