Master the art of profit making

Profit making is the one common goal of almost every commercial venture. Even NGO's target profit making so as to be able to further their cause with the extra financial aid earned through these profits. In fact, the difference between a successful business venture and a failed one lies mainly in the profit making ability of the former. Given that profit is the one major target which everyone in the commercial world aims at, the next step is to evaluate the various methods of making such financial gains and execute them for best results.

•Commission basis sales personnel – Instead of regular salaries, hire sales staff on a commission basis. Commissions act as incentives, which help spur the employees on to perform. Regular salaries on the other hand allow the employee to slacken the pace of work without effecting personal income. Extra performance by the sales force translates into higher sales, which of course has an immediate positive effect on the profits.

•Regular and accurate financial statements – Never ignore drawing up the accounts. The balance sheet and the profit and loss account are a perfect way to study the financial position of the business and understand the areas, which need attention. Identifying the problem areas before they snowball into an unmanageable crisis and taking action to prevent the situation will facilitate in the profit making process.

•Calculate cost precisely – Whether it is cost of production, marketing, overheads etc it is imperative to calculate all of these and then decide on an appropriate sales price for the commodity in question. A sales price that does not allow room for profits needs to be reworked in order to assure a profit margin. This can only be done once the cost has been calculated accurately.

•Disembarrass non-profitable items – Undertake a study of the profitability margins of the sales product/s. rid the system of the items that are not profitable, not only do they hinder profitability but also absorb energy which could be used for other more profitable items.

•Employ qualified personnel – Do not hire staff that will be unable to contribute to the profitability process. When hiring candidates ensure that they are qualified for the job and will be able to add to the business activity positively. Do not hire relatives and friends unless they are completely suitable to the job profile. •Do not mix business and pleasure – When at work focus only on work and set time aside for pleasure later. Mixing the two usually affects the business adversely. The concept that business deals are clinched during parties and golf games is a myth. A shrewd and successful businessperson will want to check all aspects of the work before launching into it and therefore will never execute an important deal based on social circumstances. A dedicated entrepreneur will always be preferred over one who is given to merry making.

•No payroll services – Both annual and item transaction fee has to be paid to the payroll services by companies that use them. These takes money out of the business and so avoid using payroll services completely. Instead, adopt a pay roll friendly soft ware, which will facilitate in undertaking the job in-house itself.

Following some of these rules and practices can ensure that your business turns into a profit making machine.