Making money requires using the KISS rule. That is, Keep It Simple, Stupid! If you are interesting in making a lot of money through your business, you need to keep things very straightforward.
First of all, be honest with yourself and make sure you analyze all your numbers. You need to make sure you know your profit or loss margin. It's important to analyze an annual profit margin, a monthly profit margin, a weekly profit margin, and a daily profit margin. Also, take note of how many transactions or customers that you handle on annual, monthly, weekly, and daily basis.
Next, calculate your operating expenses or fixed costs. You need to also know exactly how much money you need to acquire in order to break even. It's a good idea to calculate the average price of your products.
Once you've written out all of these numbers, then you need to do some thinking. Is there any way you can reduce the amount of money you need to break even? Better yet, is there any way you can raise the average price of your products. If the answer to either question is yes, then you need to implement a plan to achieve your results.
The more you sell, the more your business will benefit. Very few people know that most businesses derive 80% of their sales from 20% of their customers. This means that it's a smart idea to build a marketing campaign that targets your loyal 20%. This way, you can spend money more wisely. You don't need to waste your money trying to convince uninterested people to buy your product.
Make sure you identify your most prolific customers, and figure out how they differ from the average customer. Brainstorm and come up with ideas on how to increase sales to these customers. These customers are sure to have a strong demand, so you need to study them and figure out how to meet this demand. Finally, you can convert people into being more prolific or lucrative customers. It's a great idea to come up with a plan that will turn more customers into big time customers.
Trim the fat. This means you need to ruthlessly cut out any extraneous expenses. If you feel like you can do without something, then you probably can. Cut these expenses so that you can reduce the amount of money you are spending. This is a great way to increase your profit margin.
Also, it's a great idea to build a system that processes payments quickly. This way you can constantly enjoy regular cash flow coming into your business. If you can also come to an agreement with your suppliers wherein you can pay them in monthly increments, then you're also increasing your cash flow.
Build a strong marketing campaign. Marketing beats advertising when it comes to reaching customers. This means you need to invent and build a comprehensive marketing strategy. There are many great ways to do this. Always make sure to continue to develop your business. Stay on top of your game. It's important to keep improving your products and services.
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Thanks for reading,
Gary McGeown
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