How to increase profits in your business (part 2)
How much will profit increase?
Above, we have listed five methods for increasing profits. How much profit will increase depends on how effectively we implement all the changes in the business and how much we are able to “work” them together. Let’s look at a specific example of how much we can increase profits if we improve each of the 5 indicators by 10%. At the same time, of course, it will be difficult to do this, but it can be done gradually and in turn.
So, we are analyzing not a real, but a fictional, but still a concrete example, with numbers. Let’s see what we get, how much profit will increase.
Our initial figures are as follows: 500,000 rubles revenue, 1,000 potential customers, 10% conversion (100 real buyers), 25% repeat sales (i.e. 25 additional sales to old customers), we sell goods with a margin of 100%. It is easy to calculate that we have only 125 sales for 4000 each. Continue reading
How to increase profits in your business (part 1)
If you are an entrepreneur, then you simply have to constantly ask yourself the same question – how to increase profits? Profit – this is business. The whole point of the business is to increase profits. I don’t know other reasons for doing business. Whoever says anything. There are only five ways to increase profits in business, according to business expert Paul Lambert (the so-called Formula Five). Further we will consider them.5 ways to increase profits
1. Increase Margin
The same Paul Lambert said that business is not to sell more, but to earn more for yourself. And the more you can get from your business, the more successful your business is. And vice versa. As you understand, there are two ways to increase margins and, accordingly, increase profits: either sell more expensive, or buy and / or produce cheaper. Continue reading
How to study the market and why is it needed? (part 1)
First, let’s figure out what a market is. I say again, I write about my concepts, which do not have to correspond to textbooks. Therefore, the market for me is customers, but competitors. And that’s all. Roughly speaking, of course, but the essence is as follows. Accordingly, to study the market is to study customers and explore competitors. Just huh? 🙂
More about what it is to “explore the market”
I’ll start the paragraph as I finished the previous one – excuse me. Explore the market – this is to study customers and explore competitors. In fact, you have two areas for market research. Continue reading
How to study the market and why is it needed? (part 2)
5 steps to explore the market
1. Set the goal of market research. Do not just collect information, but decide (or rather, understand) what do you want to know? Why do you need this information? Then you will find exactly what you need.
2. Gather information. Use different sources – and communication with people, and the Internet, and magazines, and statistics of different organizations … everything you can get … Do not forget about wordstat! 🙂
3. Check the information. Sometimes information from different sources can be very different. Unfortunately, this happens and you have to spend extra time. But nothing can be done – it’s better than continuing to work, being in error. Continue reading
Industry Analysis through 40 Questions (part 2)
Competitors and Competitive Industry Analysis
22. How many competitors in this industry? Analyze your piece of the market, i.e. those with whom you are really competing. But be aware of the overall competition in the industry too.
23. Who will be (or are) your main competitor in the market?
24. How long have your competitors been in the market?
25. What market share do they own? In general, and each individual. Naturally, these will be indicative definitions.
26. Where are they and where do they work (that is, they offer their services and / or goods)? Continue reading
