5 Ways to Maximize Profit in Any Business Venture

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It's one thing to want to embark on a business venture with prospects of profit-making at the end. It is another thing to eventually start up, then successfully track your way to the top.

For most small businesses, the way to the top invariably come with challenges of failures and restarts, hurdles to clear, and problems to be avoided. At the top, well above the break-even point; a significant part remaining from the total revenue will be withdrawn in cash, as the real profit.This is the earnest expectation of every businesses people set up.

But unfortunately, according to proven statistics, the rate of failures in new businesses after a specified period of time is so disturbing. However, there are systematic ways to follow, just like a professional, and by using these you will be able to maximize profit in any of your business venture.

PROPER CASH FLOW MANAGEMENT

Cash, when it comes to financial management of a growing business, is ultimately King. Cash is the lifeblood of a business-that oxygen that sustains combustion.

Cash flow is basically the movement of funds in and out of your business system. Business owners who lack basic accounting skills may end up facing more of cash flow problems. Successful business people already understand that accounting is the language of business.

At any given time: the exact amount of money that has been generated versus the cash that has flowed out in settling operational cost; tells the financial integrity of that business. If more cash has flowed out as against the incoming revenue, then it is lacking sound integrity. 

The only way to maximize profit is to try to minimize cost on all possible fronts. The result of minimizing cost results in the reduction of the amount of capital flowing out to cover expenses.

EFFECTIVE MARKETING CAMPAIGNS

Marketing is a process by which a business introduces a product/service into the market, promoting it to potential customers. You need to let others out there know that you are there, and willing to provide a service to them.

An effective marketing plan will likely boost the successful viability of your business. Without marketing, your business may offer the best product or service in town, but the majority of your potential customers out
there know nothing about you. For a business to succeed, the product or service it provides must be known to potential customers.

Related Post: 5 Reasons Why Your Business have Not Reached Its Break-even Point

It's a smart move to consult with a good marketing expert, and brainstorm on the best marketing options to follow. Thanks to technology: the long tail of communication opportunities have grown, consisting of  many new and different channels that can now be used to reach an audience.

STRATEGIC OPERATIONAL PLANNING

I was inspired to come up with this blog post after meeting a CEO of a startup
industrial cleaning company who failed to take any profit at the end of a particular cleaning project he executed.

Firstly, the cash flow statement at the end was greatly stretched beyond the initial cash flow statement forecast and budget estimation in the business plan document. 

Secondly, the team of workers put together as labour force never really used any operational manual in carrying out the cleaning task at hand. The team were never briefed or informed about work description,
and detailed scope of work required. There was little or no supervision of workers on site. The work was done out of order, and most end-task not professionally completed.

The end result was a monumental failure! Though fortunately the job was completed after additional two weeks, after burning all the remaining cash realized from the project.

An operational plan doesn't need to be rigid to be effective, but it must provide enough strategies and directions to keep the team on the right track to maximize profit at the end.

CREATIVE, INTELLIGENT, and FLEXIBLE BUSINESS LEADERSHIPA mentality of profit maximization is something successful business leaders have inside them. Profit maximization is the ability for a company to achieve maximum profit from sales of products or services, at low operating expenses.

Almost all producers are creative people. Consumers don't need to be creative to survive. Intelligent business leaders focus on how to improve and expand the business horizon. In order to generate more riches, flexible leaders become masters in recognizing people's needs and desires, and finding ways to satisfy these potential customers.

As a business leader, if you are flat, and have no energy, it flows to your staff, to your customers, and to your profit. 


MORE SALES, LARGE MARKET SHARE, LOYAL CUSTOMERS

Sales ultimately equals income. Interestingly, more sales would lead to more income.

Every business no doubt needs paying customers. The amount of money to be realized is directly proportional to the number of products/services sold.

In order to gain a large market share, you simply have to get your product out for thousands, if not even millions of people to see. Loyal customers will translate to repeat customers, and help boast sales.

It is the failure to find and build a significant path to customers that is among the top reasons most startups and existing businesses fail.

Profit maximization involves strategic and systematic approaches geared towards ensuring that a business makes profit at the end. It is important to do the right thing- the things that will ensure that cash flow movement can be controlled throughout the life of the business.

Accountants, book-keepers, bankers, marketers, managers, CEOs, and sales
people; must effectively play their professional roles for a business to be able
to maximize profit.

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7 Things the Knowledge of Financial Education Will Teach You

A person who receives financial education becomes financial literate. Financial literacy is the ability to understand how money works in the world. A financially smart person has a lot of information when it comes to money: how to earn or make it, how to properly manage it, and how to multiply it through investing. In this post, we’ll be looking at 7 things you will learn from financial education.

Understanding Money and How Money Works
 

Prior to the invention of paper money, individuals had to meet face-to-face and exchange their goods with other people’s goods, in a traditional trade by barter system. But with the creation of money, goods no longer needed to be exchanged with goods anymore, as the purchasing power (i.e. the power to buy something) was shifted to the paper money.

And even though money exists more in electronic forms these days, the principles of how it works still remain the same. Money isn’t attracted to selfish people. It is attracted to businesses that solve problems. It’s attracted to people who fill needs and add value to the society. The amount of money in your life is a reflection to the amount of value you have given to others. Simply offer the world value, and money becomes magnetized to you. 

Understanding the real meaning of Assets, Cashflow Patterns, and Business Risks
 

While some assets can be bought straight from the marketplace, in other instance they are created or built from scratch. Tangible assets can exist in fixed physical forms, investments,
products, bank deposits or even cash. But ultimately, assets work for business owners by producing passive income.

And in the game of money, the direction of cashflow is very important. When expenses are made in the form of bill payments or purchase of goods/services, money flows from your pocket into the hand of another. This pattern of cashflow is described as a negative cashflow. But in a positive cashflow pattern, money flows in a reverse direction, either earned as fixed income or as passive income via sales of goods/services. The outstanding difference between what you earn (positive cashflow) and what you spend (negative cashflow) is a measure of your profitability status.
 

In every business venture, risk is involved. So, all business owners are risk takers. Risk is the total amount of money that is put into a business as a leverage, while anticipating an overall successful outcome at the end.

Who an Entrepreneur is

The path to entrepreneurship is like a long trek through the wilderness. The choice of becoming an entrepreneur is always a personal decision to make. The consideration is to become a job creator instead of a job seeker.
 

The mindset of an entrepreneur is focused on how to create a business from the scratch and grow it tremendously. He/she is always thinking of expanding, and even the next business project to embark in the future.
 

Successful entrepreneurs are wealth distributors, generating money from the economy through an asset exchange medium, and rewarding their employees and the government. And at the end retaining possibly tens of thousands of dollars in profit for themselves, and shareholders too. 

The Role of Sales and Marketing

Sales is equal to income. Any business that cannot be able to sell enough products/services may not be able to generate revenue to cover all its operational expenses and make substantial profit. Even in the case of an employee, the total amount of income earned corresponds to the number of hours spent working.
 

Related Post: How To Start A Business Project And Successfully Track Your Way To The Top 

Marketing is what draws a customer to your business. You need to let others out there know that you are there, ready and willing to provide a service to them. The amount of cash flowing into your business is directly proportional to the marketing/communication flowing out.

Understanding the Business Laws
 

The knowledge of the various laws guiding the business world is very important if one is truly determined for some real success. Since businesses incur certain operational and administrative costs to keep employees at work, sustain their corporation with partners, and achieve customer satisfaction; several laws are put in place by the government to protect them on so many fronts.
 

By following their operation plans of action, and understanding the tax laws and corporate laws, registered businesses can use their expenses column to get rich. Other existing laws favouring businesses include:

• security and exchange law
• licensing law
• franchising law
• intellectual property law (patent, trademark, service-mark)

Financial Accounting

Financial Accounting is one of the most important aspects of Financial Education. It is financial literacy that will allow you to be able to read the numbers, and the numbers tell you the story of the business, based on the facts on ground.

The ability to run a company from financial statement is one of the primary differences between a small-business owner and a big-business owner. I define financial intelligence as the ability to be able to correctly calculate Gross Profit, Operating Profit, and the Net Profit.
 

Other essential documents used in measuring the financial status of companies are the Balance Sheet that compares the assets and liabilities, and the Statement of Cashflow. 

Business Leadership
 

Leadership is the glue that binds the whole piece together. If you are flat and have low energy as a leader, it flows to your staff, to your customers, and to your profit.
 

The overall success of an organization depends on its leadership and management. Some traits shared by great business leaders include persistence, thick skin, fearlessness, toughness, an eye for talent, powerfully passionate, financially smart, etc.

Related Post: How To Start A Business Project and Successfully Track Your Way To The Top
 

Acquiring knowledge is very important, but after it is acquired it must be organized and put into use, for a clearly defined purpose with set out goals and objectives, through practical plans of action.

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