5 Ways to Boost Profits
No matter how many sales you make, your business will struggle if you don't watch your margins.
By Brad Sugars | April 25, 2008
One of the biggest mistakes made by startups is to confuse making sales with making money. New business owners seem to think that business is about busy-ness--that is, how many times the cash register rings. They fail to take even simple steps to ensure they earn enough to cover their costs as well as take home a healthy paycheck. Without that, you may as well be working for someone else.
Everyone who goes into business knows the need to make a profit, but somehow it gets lost in translation. People neglect to do the math to determine whether there will be money left over after they pay their bills. They promote deep discounts that cut profits to the bone. They even give services away when they shouldn't.
Case in point: a company that offered computer-based training to businesses. Part of its model was to provide free training to one person from each client's corporate staff. When one client brought four additional people to the session, the company comp'ed the four extras as well. At $1,000 a pop, that was $4,000 of pure profit lost.
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