Generating revenue is undoubtedly one of the main reasons for you to begin your business. Any honest entrepreneurs would tell you the same thing. Even if you spend a lot of money in socially responsible business practices, donating business money to the impoverished people or support your workers to contribute to the community, the profits are still vital for the survival of your business (Also see Characteristics of Successful Business Owners).
Besides engaging an accounting service in Singapore to ensure the financial health of your company, the basics of generating healthy business revenue are always maximising earnings and minimising expenditures
To assist you in gaining your profits (Also see Investor Ratios in Financial Statement) , we have listed down some tips which will lend you a helping hand in achieving your targets.
1. Reduce Expenses on Client Acquisition
Maybe you did not realise this; however, the advertising and marketing you invest money in is the cost of obtaining your clients. If you need to spend S$20 on each client, that is a great deal of money, particularly for a small company. You will have to figure out ways you can organise better advertising and marketing campaigns that cost you less while obtaining more clients. This can be done if you are paying more attention to value, rather than on making an effort to become fancy.
2. Increase Profit Margin per Sale
If you wish to grow your profit margin, there are two ways (Also see How To Determine Profit Margins On Services) – either by increasing your prices or reducing your expenditures. If you can do both simultaneously, it is going to bring a substantial increase in the revenue generated. However, in a real situation, you will only be able to accomplish one of them.
The trouble with rising prices is that you may lose the clients you have now. Hence, most of the entrepreneurs have a higher tendency to concentrate on cutting down their costs so that their revenue will increase. There may be numerous stuff that you are investing money in which will not bring any value to your company. You will have to determine what these expenditures are because this enables you to eliminate them right away. When you finish doing so, more money will be leftover in your business after expenditures have been settled.
3. Remove Expensive Activities and Services
If providing the service after selling the product cost more than the product itself, you have to stop giving the service immediately. Losing money on a sale does not make sense at all. When this occurs, you have to boost your sales in other regions to cover up for the loss when offering that high-priced service. You have to stop offering the service if the cost of offering it cannot be lowered. If your other cost-effective services give a lot more value, your clients will not detect the loss for sure.
4. Improve Customer Consultation
Producing and sustaining satisfied consumers indicates that more people are discussing your business, raising brand awareness as well as creating leads. When your existing customers are delighted about the service you offered to them, they are going to spread information about your business among their family and friends and tell them why they have to be a consumer of your company (Also see Pros and Cons of Setting up a Corporation). Word-of mouth advertising and marketing is one of the most effective types of advertising. It is the greatest proof that your services or products are at the price that is worthy for them to promote. New customers are going to feel that the services or products you offer to them worth the money they have put in as have a lot of past customers who are still keen on purchasing from you.