Management of Profits Homework Help
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For a small business to be successful it has to make profits continually otherwise the company will not be able to stay in that particular business. Earning a profit is important for a small business because then it would have an assurance that it would have financing from the banks, and lure investors to provide funds for the competition of the operations and expand its business. Profit is defined as the company’s revenues after deduction of the expenses. Certain strategies have to be adopted if a company wants to make profits and the management crew of the company must understand the importance of profitability for their company and hence act accordingly. Further in Management of profits Homework Help the importance of profits and management strategies would be discussed in detail. Profitability in a business plays a significant role in the expansion of business operations since making profits allows exploring other business locations, targeting other markets and acquiring other businesses. Higher profits as a result increase the advancements in the operations as well and hence more workers and employees would be hired who can handle the growing responsibilities.
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Strategies to manage profits
Once the key profit drivers are identified and measured, ways and strategies to reduce costs and grow those profit drivers have to be formulated. The different strategies incorporated to manage profits are explained in Management of profits Homework Help.
• Increase sales revenue: Sales revenue can be increased by increasing the productivity of the staff of the company which is possible by promoting and appreciating their enthusiasm by proper recognition and rewarding them, when the employees contribute towards the betterment of the company. Employees can be incorporated with sales skills to increase their efficiency. New product lines should be developed and for that new customers have to be approached hence new and different markets have to be found out. Further improvements of the customer service, price discounts and retail displays to please the customers. For better understanding refer Management of profits Homework Help.
• Decreasing the costs: Stock control is one way of controlling the business in a streamline manner and this is achieved by decreasing the inventories. Reduction in the production cost due to errors and wastage generation in the business by training the staff and adopting low cost marketing techniques. Choosing right suppliers for the business and negotiating with the right prices and discounts for buying the goods help in saving from losses.
• Focusing in profitable items: Products and services with high profit margin are crucial for the benefit of a company since they generate more money therefore once the profitable items are identified getting higher sales targets for them should be looked after and hence different strategies for achieving those should be framed.
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