Every company seeks financial security. Simply stated, this elusive company financial security is nothing more than Net Profit, or the money that a company makes. Truthfully, this highly sought after financial security results from the expansion and growth of your company, and relies upon your company’s ability consistently generate sales and make money from those sales. This article will highlight a few things to always remember and remain aware of regarding Net Profit.
First, Gross Profit. Lowering the selling price of your products just to make the sales sets up an even lower net profit, hurts your sales incentive plans, and creates more work for you down the road. In order to keep your business growing you must show the bankers, who finance your growth on the strength of your earnings, that you are continuing to make a profit. The solution? You cannot continue to sacrifice prices for sales. You must compete with the level of service that your company and sales team are providing. Selling prices may be determined in the field or store. As long as everyone is in agreement on these prices and supports them with quality service you can concentrate on improving the bottom line.
Second, Accounts Receivable. Simply put, customers need to pay their bills according to the terms in which they agreed. Yet they need to be treated professionally. Your sales and credit managers need to hold the line and make pricing and credit decisions, policies and procedures that are positive for both the customers and your company.
Third, Inventory Management. You need to increase ‘turns’ (the number of times a product is sold and restocked and sold again) while still servicing the customer’s needs. Until your products are sold, it is costing you money. You cannot create a profit or at least even have a chance at a profit until you sell. Sell what you have in stock and stock what you sell.
For further assistance and information regarding the key steps to improve the financial success of your business, contact Bottom Line Management, Inc., online at https://www.botline.com,
phone at 470-990-0160.
Since 1987, Bottom Line Management has provided personalized, ethical business brokerage services to many successful businesses. Make the simple phrase NOTHING BUT NET your business reality today by contacting Bottom Line Management, Inc. at https://www.botline.com.