Are Your Businesses Profits Being Swallowed Up?
Written by Suj Legha
Without a doubt, some businesses have been enjoying an increase in growth on a yearly basis and one might begin to wonder why there is a steady reduction in the profit margin that comes from some industries. 

It all sounds so promising and endearing but doesn't negate the fact that most business owners are struggling with getting a return on their investment. 

Thus, the question that lingers in the mind of many is...

"what is the cause of the low-profit-margin in the your business"? 

The answer is not farfetched. Higher overheads, and operating costs obviously don't help but I think it boils down to ineffective planning.

The mechanism of operating a business stem from is anchored on two fundamental elements which are emotion and control. The formal have to do with displaying appealing qualities towards customers that will drive them to your business. Qualities such as service, compassion, tolerance and putting on a warm smile, are potent in appealing to customers ego. 

Having a measure of control will help you make sound decisions, and they're essential when you're about making choices that concern the growth of your business. It is vital to note that these fundamental elements are symbiotic, they need each other to be effectual. 

Picture them as the Bonnie and Clyde; one needs the other for survival. Most business owners might argue that they utilize these elements but still battle with the issue of low-profit-margin. The problem stems from paying attention to one aspect and leaving the other sideline. 

It never works that way; they need each other to spur the growth rate of your business. We will discuss four key areas that can downsize your profit margin and how you can increase the profit margin in your business.

1. Poor Competitive Price

Subsidizing prices as a gimmick to attract customers with the aim of staying ahead of your competitors is bad for business. You will discover what you've is quantity not the price quality of the service you're offering and with time you might be plunged into losing. 

So far you're offering fair pricing when compared to others that's fine. What you should be competing about is the value you're bringing to your business, that will help you grow as a venture.

The holistic truth even when your prices are reasonably high, you will still get customers to patronize you as long as you're giving them a substantial value. 

Here are ways in which you can outshine your competitors through the quality of your services.

• Invest in your employees

There is a famous saying that "you can only give what you have" which implies that your employees can only offer quality services to customers when they are full of it. 

And this can happen when you help them to improve by providing necessary tools such as books and audios that will help them develop a skill set that will help them achieve this course.

• Steer clear unhealthy pricing competition 

Don't condescend in the pricing of your product or service in a bid to snatch customers from contemporaries. You need to realise that you're in no way competing with anybody. Rather than paying attention to other people's loss, compete with yourself as a way to drive yourself to do better.

2. Don't Get Swamped

It is okay to have a set-out vision for your business and to stay prolific in a bid to achieve it. Where caution needs to be taken is getting swayed from what it is required to be done and handling things you can readily entrust to your employees. 

There are cases where you might not be satisfied with the way they're handling a task what you might need is taking time out to explain and encourage them to do better. 

Nothing stops you from getting your employees to manage the inventory, getting another employee to handle the purchase of items. All you need is to sit back and visualise other perimeters you can explore that will improve your business and in turn your profit margin.

3. No Recruitment Process

There are cases where customers might not be aware that you own the business because of the beautiful relationship they've with your employees. An employee that isn't appealing to the emotions of your customers is doing your business more harm than good. 

You need to watch out for those who come in mainly to pass the time and add up to your weekly expenditure. Their presence is lethargic to the growth of your business. Develop that ability to fire such ones when you can't see any light at the end of the tunnel. Fire fast and hire slow.

4. Poor Managerial Skills

A business owner is fully aware of what needs to be done to improve the profit margin of its business. Have a budget and work closely with it. Stick to your business plan or restructure specific areas that might not seem functional. 

Make the serene of your business homely. Give your customers a reason always to come back to have an exquisite taste of your service delivery. 

No business owner is oblivious of all these but the drive to actualise them is what is lacking. Don't be that type of entrepreneur who searches for a reason to tell stories of his ineptitude. In a way, a business is akin to a marriage. You need to be committed and loyal to stay true to your course.

Either In Or Out. Nothing Like Halfway

There is a man named Hernando Cortex who aimed for the treasures of the Aztec. To achieve this, he set sails with 500 soldiers, 100 sailors, and 11 ships down to the shores of Yucatan. Both cortex and his men were aware that they have no chance of being successful in stealing the treasures of Aztec. Some of his men made a decoy by trying to sail back to Cuba. To instill discipline, Cortex ordered his men to burn the boats. 

What is the moral of the story? 

The display of commitment can heighten your chances of achieving success.
Although the business can be challenging, distressful and daunting when you're committed towards success there is no going back. 

In every facet of one's life change is imminent and you should embrace it in your business. Never condescend to failure and watch your profit margin climb up the ladder to financial restoration.

Suj Legha

Suj Legha helps business owners grow successful businesses.  He is a multi-award winning, certified business growth expert with ActionCOACH and uses world-class proven systems and models so you can attract and retain more customers, and increase sales and profitability without wasting money on marketing that doesn’t generate you a return on investment.  

If you're interested in accelerating the growth of your business and want to make more money then definitely reach out and request a free strategy session today.
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