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CHAPTER 6 HOW TO GENERATE MILLIONS IN SALES & PROFITS

Boosting Your Profit Margins

There is no use selling hundreds of thousands or even millions
of dollars worth of products if you end up keeping very little
of it as profit.

CEOs of highly profitable business track and measure profit
margins consistently and apply strategies to ensure that for
every $1 they receive in a sale, more goes to the bottom line.

Basically, there are only two main ways to increase your profit
margins: They are 1) increasing your prices and 2) cutting
costs. Of course, you have to ensure that raising your prices
does not result in lower sales and that reducing cost does not
reduce your product quality or business effectiveness. This is
the tricky part. In this next section, you are going to learn how
to do just that.

Tracking your profits monthly, or even weekly, is important
because, when left unchecked or uncontrolled, your cost of
doing business will slowly rise, reducing your margins and
eating away your profits. For example, your supplier may
increase their prices, a marketing strategy may become less
effective, rentals may go up, your taxes will increase with
profits and more competitors may force you to lower prices.

Here are some strategies you can use immediately to increase
your profit margins by 20%. In every business I have consulted
with (even my own), I have found that there are at least 10%-
15% of unnecessary costs that can be cut immediately by
doing things more efficiently. At the same time, most businesses
can raise prices by 10% without affecting demand much, if
they offer much higher value to their customers.

SECRETS OF BUILDING MULTI-MILLION DOLLAR BUSINESSES 193