Best way to increase profitability

Submitted by dp_jpfart on Thu, 12/07/2017 - 01:24

Some company prefers these methods to increase profitability:

1. Increase Price

For those who have 100 customers that pay out $20 monthly, you'll have $2000 every month. But, if you can create a way to increase the price of your product. So with the same 100 customers, you can charge them $40 monthly, you'll have $4000 every month instead of just the $2000. But additionally remember that whenever you improve your price, you must boost the quality of the products, as well, since your customers expect more out of your products now than before.

2. Increase the Number of Customers

Let's go back to my previous example; you now have 100 customers paying $40 per month which provides you with $4000 each month. You can then start increasing your number customers. Yes, it sounds more natural in theory but simply consider how you were able to get your first 100 customers. Apply the same to recruiting new customers. Get in touch with the same types of people. May also increase your advertising and marketing budgets. Referral system also proves helpful. Ask your existing customers to refer new customers. In return, give them some freebies or discounts every time they refer new customers.

3. Increase Usage Rates

This increase requires that people will spend more money on toothpaste and toothbrushes because they're using much more of it and deteriorating faster. Also the yearly dental costs doubles.

4. Decrease Costs

Look back at our illustration of 100 customers paying $20 per month, and let's break down the costs. Let's imagine that $20; your company cost is $3 per product. Here's where you take a look at all your options and see where cuts can be created to be able to decrease your costs to $2.00. If you're able to find a way to lower your operation cost, your company will undoubtedly make more profits.