Examples for Achieving Profits

If our company needed to achieve a 10% increase in profits in only three months, we would require moderate savings in expenses and a reduction in investments (like capital costs, upstream marketing and new profit centers, among others). And at this point, we would be very adverse to risk.

If a more drastic increase in profits were called for, we would likely take the following steps:

1. Cut expenses across the board

2. Halt all new investments

3. Terminate profit centers that are off-mission or that cannot substation a high profit percentage

However, the problem with adopting the above procedures is that they are likely to also halt business growth, which will ultimately lead to reduced profits down the road.

Rather, if our company wanted to focus more on reducing expenses than increasing profits, the first place to zero in on would be marketing expenses. Advertising and marketing represent a significant part of our overhead expenses and can be cut with no immediate impact on current business operations. As I have previously pointed out, this would have the effect of stumping future growth, but it would be one area that would not have a deleterious impact on current booked business.

If Dataprise set the goal of reducing expenses by 10% over a period of a year, it would certainly be easier given the extended time frame, rather than a more intense focus of three months or so. If this were easy, everyone would do it. Its been my personal experience that most business owners feel that they are always maximizing profits and that there arent usually any easy ways to simply increase them. That said, almost every business can improve margins and reduce expenses given the time to do so.

Throttling back on non-critical growth areas, marketing expenses and even some labor costs could offer methods to achieve such savings. Retasking current staff or doubling up on job functions can potentially eliminate redundancies and provide savings. Of course, the question always remains whether or not increased workloads and decreased marketing can be sustained for the long haul.