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The Foolproof Way to GrowYour Business If you’ve got a business that you want to grow this year, there are only five areas you need to look at. Over the next few months, we’ll be taking a look at each one, with some simple ways to make a difference to your business straight away. The first step to growing your business is to look at your profit. When I’m working with a business owner, it’s rare they can answer when I ask “What is your gross profit?” They often say: “Oh, my accountant knows”, or, “I’m not sure, it’s complicated.” Keeping a close tab on profit is the first step to growing your business successfully – or you may grow a business that just breaks even, or loses money! Last month I worked with three businesses who were shocked to find out they were only working with a profit margin of around 5 per cent or less – which explained the sleepless nights and stress. Their turnover looked good. Their bank accounts? Not so much... A healthy gross profit is around 30%. I go so far to say that anything under 20% is a hobby (an all-consuming and stressful hobby!)
2. Reduce costs and overheads (and get rid of things that don’t work, or things you’ve always done that don’t add to the business); 3. Focus most on selling your most profitable items (instead of your favourite); 4. Put any marketing spend in promoting only your most profitable offerings; and 5. Introduce bulk-buying and offers to get people to spend more. Take a look at your business from today, and make small changes. Make your time, effort and risk worth it – and enjoy the fruits of your labour. Rachel Goodchild, managing director of Identify Marketing www.identifymarketing.co.nz
So how do you increase profit? Here are some simple methods 1. Increase prices (of course!);
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