Profit helps the company not only survive, but also develop. With additional money, you can open new directions, expand the list of assets.
That's why company executives are interested in increasing profits. But how can they do this when it seems like they've tried everything?
The main directions are increasing sales and reducing expenses. The company can increase assets. They will bring it additional profit.
Cutting costs
Reducing expenses does indeed produce results. But the company should not experience additional difficulties after doing so.
Therefore, all expenses should be divided according to their degree of importance.
- High degree. Such expenses cannot be reduced.
- Medium level. Refusal of expenses only in extreme cases.
- Low degree. You can safely reduce such costs without damaging the company's operations.
Expenses of high importance include, for example, tax deductions to the budget. They are paid in any situation at the enterprise.
Marketing costs are considered to be of medium importance. Here you can refuse promotion channels that are not effective.
Low-level expenses include additional conveniences. If they are removed, the comfort level will only decrease slightly. But the enterprise will be able to operate without restrictions.
Important! It is necessary to ensure that the reduction of some expenses does not lead to an increase in others or the creation of serious problems at the enterprise.
Increase sales
Increasing sales involves receiving additional orders. But they also lead to additional costs. Therefore, the main goal of the organization is to obtain maximum profit with minimum costs. Increasing sales most often gives a positive result. The company receives additional money.
Income from assets
An organization can receive income from assets. For example, an organization has a car. It rents it out, receiving a certain monetary reward for it. Another example is securities.
The company may receive dividends on them. When leasing property, its depreciation must be taken into account. If the company provides training services to people, it may use teaching materials as an asset.
An asset can not only bring in monthly income. It can be sold when the company needs a large sum of money. In such cases, the asset acts as a kind of insurance.
Optimization of company operations
When talking about increasing profits, expenses and sales are remembered. But they forget about the optimization of the enterprise. And this tool makes it possible to make the organization's work more efficient and increase profits.
A simple example. The company's employees generate a report in Excel tables for each month. Installing the software will help to improve the work. There will be less routine work and more working time.
Optimization of business processes at the enterprise helps to increase labor productivity. And this economic indicator directly affects profit. The higher the labor productivity, the greater the company's profit.
If the organization is engaged in manufacturing or cargo transportation, then within the framework of optimization it is possible to minimize the downtime of equipment and machinery. This also applies to the rental of real estate. Here it is possible to minimize the number of days when the object is empty.
The company's management can optimize not only the work process. An effective personnel policy is important.
To ensure that employees do their job effectively, it is worth holding regular trainings, seminars and other corporate training. KPI can be introduced into the remuneration system. This is a digital value of the degree to which the set goals are achieved. The KPI indicator allows you to see how well employees cope with the tasks set.
Earlier we wrote about what prevents a manager from enjoying authority among employees .
