November 29, 2017
Increase Your Bottom Line Even in a Volatile Environment – Go Back to Basics
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Many companies have recently experienced a significant reduction in sales and reacted by cutting costs and right-sizing their P&L; however, the cutbacks have left many businesses in a less than favorable situation. How do you bring your business back into balance after change and restructuring without limiting your ability to grow? The answer is to optimize the key fundamentals of your business that allow you to increase your bottom line.
The most effective and impactful place to start improving your bottom line is higher on the income statement: begin with a healthy gross profit margin. Improving gross margin requires smart decision making about your products or services and starts with understanding what your customers want and need and how to reach them on an emotional level. These insights, along with pricing and cost decisions, are the keys to becoming and staying profitable.
What should you be aiming for in terms of gross margin? This varies across industries but at the most basic level, your gross margin should be sufficient to cover all operating expenses while allowing the business to realize the desired amount of bottom line or net income consistent or better than industry peers.
Below are key suggestions to increase your gross margin:
Sound business fundamentals are not only cost-focused; they are customer-focused as well. Successful companies are taking advantage of this economy to grow their business and expand market share. Now that you have improved your cost fundamentals, grow your top line. Identify your target market, know your customer, differentiate yourself and aggressively go after new business.
Below are key suggestions to enhance your sales strategy:
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