When it comes to small business management, the goal is to maximize your profits while meeting your customers' needs. When you want to increase your business income, sometimes it is not as easy as just generating more sales. There are many other steps that you can take to get the most from your sales and operations.
Work with your parts and product suppliers to reduce your cost of goods sold. If you can negotiate a lower cost, a volume discount or other cost-savings deal, you can reduce your expenses. Product packaging, although often overlooked, is another contributing expense. Consider a revised product-packaging design that is less expensive to save additional cost per item. Reducing your cost increases the profit margin on your products if you keep your pricing at current levels, increasing your income.
The salaries that you pay to your employees and the associated employer taxes, are an additional expense that reduces your net operating income. If you can reduce your labor cost, either by eliminating positions or reducing shifts, the savings are reflected as an increase in your operating income.
Talk with representatives at your utility services. Conduct an energy audit on your building; add solar panels and other energy efficiency features to reduce your energy costs. Most utility services offer a free energy consumption analysis, and you can opt for cost-effective improvements that do not require a large cash investment. The money saved in monthly energy expenses increases the operating income.
Evaluate all the operating expenses that your business incurs. From your insurance premiums to your overhead and supplies, there are areas where you can reduce your spending. Choose less expensive options whenever possible and eliminate unnecessary spending. The fewer expenses you have, the more money your company records as income.