Palmistry 

How to increase profits in a retail store. How to increase sales in a small store

The success of a business does not depend on miraculous luck, but on purposeful efforts, the right investments and conscious actions. If it seems to you that it is unrealistic to increase the profit from sales by several times, check out the proven methods with proven effectiveness.

Successful business is the dream of every entrepreneur. But it is not being built “at the behest of a pike”, but exclusively by purposeful efforts, the right investments and reasonable actions.

Sometimes it may seem that increasing sales at least twice is very difficult, almost unrealistic. Someone will unconditionally agree with this statement and will continue to be content only with what he manages to get without much difficulty. The other, on the contrary, will be puzzled and will look for ways that can help him change the usual situation. Ask yourself simple questions: Do you want to significantly increase your potential profit? How can this be done?

If we imagine the sales process as a certain formula of interdependent elements, it becomes clear that its components will be:

  • potential clients (PC);
  • actually applied customers (ROK);
  • real buyers (NP);
  • income (D);
  • real profit (RP).

To increase profits, you need to work on increasing the performance of each of the elements, and if all components are raised by at least 15%, then your net profit will increase by a little more than 200% as a result.

How does it work in practice?

1. We increase the number of potential customers

To do this, you just need to send out many more messages promoting your product to more specific addresses.

Also, make detailed analysis of your advertisement and define:

  • how many promotional messages you send weekly to real email addresses;
  • how many contacts are in your mailing list;
  • whether you distribute colorful flyers with advertising and how many;
  • do you have your own social group in all known social networks;
  • how friendly managers work in your team and how often they thank your customers for the purchase, and then ask them to recommend your store to their friends;
  • whether you practice giving a discount to regular customers if they bring their acquaintances to you.

All these techniques will help you significantly increase the number of new potential customers.

2. We increase the number of customers who actually contacted you for a purchase and left a request

To increase this important indicator, you need to determine the conversion rate of your advertising:

  • how often and how many people came to your site for a certain period of time (per day, per week, per month) and how many of them specifically bought something or left their request for the necessary product;
  • What is the ratio of leaflets with your advertisement distributed by promoters and potential buyers who applied after that or calls made by them.

It is simply necessary to conduct a detailed analysis of each advertising line, since it is very important to understand which advertising gives a real response to potential buyers, and which is unresponsive, and it makes no sense to invest in it. For these purposes, you can use various electronic offers and counters, but the easiest way is to make yourself a new rule: ask each client who comes to you where he learned information about you. It's not difficult, but this way you can have the most real information.

3. We work with real buyers

To significantly increase this component of your sales, you need to work with the appropriate department in your organization. There are two ways to go in this case:

  • increase the number of calls to specific customers;
  • improve the quality of these calls so that most of them lead the customer directly to the purchase.

To increase productivity in two ways at once, you need to implement high-quality scripts. There should be a whole set of them for all possible customer objections: I'm not interested in this, it's expensive for me, I'll think about it and others.

And in order for your staff to work better, attracting customers by all means, it would be most reasonable to pay them according to the principle: salary plus a percentage of sales, and if you do not limit the ceiling of their potential income, then they will work with maximum efficiency.

4. Increase income

You can achieve an increase in this indicator as follows:

  • raise the cost of goods;
  • increase sales in the appendage, the so-called cross-selling.

The first method, as a rule, does not raise questions, since even a small increase in cost of 5-10% will significantly increase income.

To implement the second method in practice, you need to think carefully about what else you could sell to the buyer right now along with the main purchase and why it is very profitable for him to purchase these goods at the same time?

So, when selling stationery, you can sell them in small wholesale, several pieces with a small pleasant discount on each subsequent unit of a similar product than with a piece purchase or offer any small goods as a gift when buying significantly more expensive. And if the buyer chooses a shampoo, then he can be offered an appropriate conditioner, as well as good mask for hair, so cross-selling will increase your income.

5. We increase real profit

The real net profit is obtained from the income received minus various associated costs. To increase profits, you need to analyze the possibilities of reducing costs. This can be done in completely different ways:

  • make purchases in larger quantities, and as a result, negotiate with the supplier for more significant discounts;
  • revise staffing and reduce unnecessary or redundant posts;
  • abandon expensive outsourcing and introduce a more financially accessible position for the company as an accountant and in other ways that are most reasonable to apply specifically in your case.

Analyze the activities of your company in all of the above parameters, think about what can be changed, write down your ideas, set yourself specific deadlines for their implementation. Act wisely and systematically, and as a result, you will receive a significant increase in profits.

On the financial stability firms, competitiveness, investment attractiveness affect net profit. This is the result of the enterprise, formed after the deduction of all costs and taxes. During the crisis years, many enterprises faced a decline in income and sales. To overcome this situation and stay afloat, the company must use ways to increase profits.

Let's look at how to increase the profitability of the enterprise by 100%.

What is profit

There are several formulas for calculating this financial indicator:

  1. Revenue - Production cost - Expenses (production, general business, other) - Taxes.
  2. Financial profit + Gross + Operating - Taxes.
  3. Profit before tax - Taxes.

Different ways of expression, but the essence is the same.

Let's calculate the net profit on the balance sheet using an Excel spreadsheet:

The figures are conditional. This calculation allows you to see what determinants affect the formation of profits.

To obtain net profit, you need to find profit before tax, marginal and operating.

How are these indicators related?

  1. Gross (marginal) illustrates the effectiveness of sales.
  2. Profit from sales (operating) shows how productive the main activity is (production efficiency, for example).
  3. Profit before tax is net of other income and expenses from ancillary activities.

Thus, net profit is an indicator of the efficiency of the enterprise, freed from all costs and expenses.



How to increase the profitability of the enterprise by 100%

In essence, three determinants affect the return on investment: the cost of the product, the volume of sales, and the costs (fixed and variable). Let's see how to increase the profitability of the enterprise by influencing one of these factors.

Let's use a simpler table:

The products sold are profitable. The business margin is 10%.

How to change each factor to increase profit by 100% (keeping other conditions):



The leverage effect will be only three. Although cut fixed costs hard enough. You can save on overhead costs (travel, employee training, eliminate losses from downtime, etc.).

Let's try to increase sales by 10%.


Profit only increased by 29% (compared to a 100% increase in profit for a 10% price increase). The leverage effect is three.

To overcome the crisis, the company needs to use all methods to increase profits. Let's look at one more example.

Recall that profit consists of turnover multiplied by margin (formula above). Turnover is the product of three elements: the number of customers, the number of purchases (how many times customers make a purchase in a certain period) and the amount of the average check. Expanding the formula further: the number of customers is the number of potential buyers (leads) multiplied by the conversion of buyers.

Potential buyers are people who have shown interest in the product (went to the store, called the ad, looked at the website). Buyer conversion allows you to find out how many potential buyers became real (made a purchase).

So we came to the detailed profit formula, which was indicated at the beginning of the article:

(Number of leads * Lead conversion) * Average check* Number of purchases * Marginality of the business.

Calculate the company's profit for the previous period:


How to optimize these factors in order to increase the profitability of the enterprise by 100%:


We increased the number of potential buyers by only 15%. Customer conversion - by 5%. The amount of the average check - by 15%. Marginality - by 5%. As a result, profit will increase by 100%.

Thus, by influencing only one of the factors, it is difficult to achieve the necessary improvements. The greatest impact on the profit of investments is the price, the smallest - the volume of sales. A drop in sales will not have as critical an impact on profits as a drop in prices. It is important to avoid the simultaneous reduction of these two indicators by any means.

variables and fixed costs(together) affect net revenue in much the same way as price. Therefore, the best way to increase profits is to optimize costs and prices.

In I promised to tell you about one interesting experiment that I conducted in 2016.

I bought a losing business - a bakery full cycle- and in just 2 months, thanks to the introduction of management tools and cost optimization, we managed to make the business profitable. Revenue grew by 4.5 times, we opened new outlets, created a brand, almost completely renewed the team of employees, etc.

Once again, I was convinced of the effectiveness of the approaches that I talk about in my and training courses. It was these techniques that helped turn an almost ruined business into a profitable bakery.

Why did I decide to invest in a bakery?

I must say right away that I did not open a bakery from scratch. A working business was with my friends. For about a year this business was in the red. And tired of reporting his money every month, one of the owners decided to abandon this business. We agreed on a deal.

Despite the fact that all my time is taken up by other projects (related to consulting and training), I decided that I would develop a bakery for several reasons:

Reason 1. This is a socially beneficial business

I especially respect entrepreneurs who are engaged in production. Services, trade is also great, but it is the manufacturing business in Russia that causes me special respect. It's one thing to order goods in China and resell them at a hefty markup. Another thing is to organize the production of quality products in your region, provide people with jobs, supply products to schools and kindergartens in the region. It is the manufacturing business that Russia lacks today.

Reason 2.This is a new experience

All areas of business that I was previously involved in are services (consulting, building sales departments) and trade (online stores). Of course, I have often worked with manufacturing companies on consulting projects, but I have never personally owned a manufacturing business. I really wanted to have this experience.

Reason 3.This is my challenge for 2016

In Yitzhak Adizes' book, New Reflections on Management, I came across an interesting point - if you want to learn management, you don't have to go to Harvard. You need to open your own restaurant.

Contrary to popular belief, I don't think Harvard University offers the best program for management training. Moreover, I believe that there is no worse place for mastering this science. The perfect place for the development of managerial skills - this is ... an ordinary restaurant. If you succeed in running such a business, then you can do anything.

(c) Yitzhak Adizes

A bakery is, of course, not a restaurant. But it is very close in spirit and level of complexity of management (management).

I wanted to try my hand at whether or not I could turn an unprofitable, almost closing business into a profitable company.

How to increase revenue by 4 times? 7 Solutions That Transformed Business

I will formulate my conclusions in the form of brief theses.

1. The accounting system is the foundation of effective management

It was a big surprise for me that the bakery did not have any accounting system at all. There was no computer in production. Invoices were written by hand. All this created grounds for abuse by some employees. After all, check all settlements with buyers and suppliers, write-off rates for raw materials, etc. it was hard enough

Is it possible to manage such a business? The question is rhetorical.

That is why the first step that I took was the organization of the accounting system. Accounting 1C copes with this task perfectly.

One day a driver working in a bakery said:

Here before it was possible to take a pie. And no one considered them. And now not a single roll will go to the left))

The accounting system made the business transparent and manageable, created the ground for making further management decisions.

Seems like an obvious thing. But many SMEs today operate without effective accounting systems. Paper accounting, lack of analysis and planning - all this reduces the efficiency of the business. It's time to think about automation.

By the way, one of the elements of remote control was the reception of "SMS at the end of the day": the number of manufactured products, sold products, revenue per day for all points, expenses. This information allowed me to keep my finger on the pulse, even when I was with corporate trainings in other cities.

2. Own people in key positions

You need to work with people you trust. Especially when we are talking about key positions in a small company.

I myself could not fully focus on the bakery and be there every day. I had other projects. I could only periodically find myself inside the business. Basically, I was engaged in strategic management and development - decisions on personnel, on new points, agreements with suppliers and new customers.

That is why it is important that during your absence from production there is a person whom you fully trust, who will be interested in business development and will not deceive you. Businesses are based on such people.

3. Marketing will transform your business

What kind of marketing was in the bakery initially? Probably, you already understand that it was not at all. The customers of the bakery were mostly acquaintances and people who accidentally found out about it.

In the first weeks of business management, a bakery website was created, business cards and a logo were designed, products were presented in a new way: it was not a price list in Word with Times New Roman font, but beautiful appetizing photographs of freshly baked products.

It played essential role in the development of the company.






Once again, I was convinced that most small businesses are poorly positioned on the Internet, their sites are not selling and interesting (they were created, most likely, so that the site would just be), they do not advance on the Internet.

Just imagine, in a few months the bakery managed to be promoted to the first positions in search engines at no cost at all.

If a client was looking for pastries, pies, or a bakery in our city, he inevitably ended up on our website. Now there are technologies for creating sites (simple and templates) - even a beginner can figure it out and create a site without knowing programming codes. And this site will work for you and attract new customers to you.

4. Plans are relevant in any business

I have been working in the banking industry for many years and as far as I can remember, there have always been plans here (although I know older employees who were lucky enough to work in banks when there were no sales plans yet. But I did not find such times). I have long been accustomed to the rule - each employee must pay for himself. This must be built into any business model.

It doesn’t fit in my head how a business can work without goals, sales plans and any standards. Even if the business does not have a sales department, there must still be plans and regulations for each employee.

In the bakery at the time of purchase, of course, there were no plans, production standards, or payback calculations for employees.

I was faced with the fact that no one counted the number of prepared products, no one evaluated the quality of work (only customers evaluated ... but they could only complain to an interested person - the production manager, who covered up the mistakes of her employees).

When accounting appeared, the first thing we did was to introduce production rates, to determine how much we could pay bakers and sellers for a product.

At first, the employees did not accept this approach and even tried to sabotage it, but then they understood the mood of the management. By the way, the transparency of business is not needed by the men who have been repaired, it is not profitable for them. That is why employees often sabotage such management initiatives, interfere with the implementation of crm systems, etc.

Another nuance is that when introducing KPIs, employees can find dozens of reasons why they do not fulfill these KPIs: they will tell that they do a huge amount of work that is not taken into account in KPIs, that KPIs are set incorrectly and it is unrealistic to fulfill them, etc. You need to calmly, but with understanding, switch the attention of employees to the main things - first, the standards for output, sales, then everything else. This approach works great both in sales departments and in general when managing a business.

5. Fire underperformers quickly

When you keep statistics and production rates, you see the full picture - how much money the employee brought in, and how much he received. Sometimes the bias is so significant (for the worse) that decisions need to be made immediately. Or lower the level wages employees (as an option, transfer to another payment model), or dismiss.

I am not a supporter of firing employees and I always hope that one more chance will allow a person to increase his efficiency and not lose his job. At the same time, I pay attention - ONE chance. If the employee does not understand that it is time to start working differently, act decisively. Say goodbye to him.

In the case of the bakery, we chose the option of changing the payment system (by the way, some of the employees, immediately realizing that they would not be able to sit out and now they would have to work, hurried to leave themselves).

We have reduced the salary and made the wage system more fair - if you work better, more actively, then you get more than others.

6. Jobs must be attractive

The need for employees arose immediately. And when we began to expand and reached new production volumes, the need became even greater.

Previously, the job description was quite simple. It did not stand out against the background of others, did not arouse interest among applicants and, accordingly, the number and quality of applicants left much to be desired.

People work for money. It is a fact. But in addition to money, many people want to be part of a serious company, work in a good team, they want their opinion to matter to management.

By changing the description, we received a stream of new applications. We have added a logo. They wrote about the achievements of the company (that we work with schools and kindergartens), that the contracts are long-term, the work is stable, and we need professionals in their field, to whom we are ready to pay for output and quality.

For several months, we regularly received applications. There was a turnover, but there were also options for replacement (there were always in reserve).

In the following articles, I will analyze this topic in more detail, because. I regularly receive questions from subscribers about how to find employees, what channels for finding personnel are most effective.

7. Active sales give new customers every day

Once we were up and running and we had capacity left to fill with new leads, I experimented with acquiring new customers through cold calling.

In terms of conversion, these are some of the most effective calls on Youtube. In 40 minutes, out of 11 calls, 5 meetings with interested clients were set up.

This once again shows that active sales (including cold calls) are an excellent channel for obtaining new customers.

If your production capacity allows you to serve new customers - download this one and start using my methodology to attract customers.

If you are still not using the model active sales in your business and want to implement it - get in touch with me Let's discuss your project.

My mistakes

There were also mistakes. Obvious and simple, which I will try not to allow again in other projects.

  • Rarely appeared in production. Employees need to be kept on track. We must show our interest in the final result, celebrate the contribution of each employee and support them. Daily planning meetings are a must (and not once a week, as we did). The lack of attention from management reduces the motivation of employees, and sometimes even encourages them to leave the company.
  • I hoped for the decency of other people, but this was not always justified. People in key positions sometimes do not act in the interests of the company. Unprofitable contracts with suppliers. Incorrect interaction with subordinates (as a result, the loss of valuable personnel). All this comes up when you start working with numbers and make your business transparent.
  • On the certain stage I wanted my employees to understand me and think the same way, to be on the same wavelength with me. But not everyone can and wants to do this, employees are not required to understand the owners and enter into their position. People came to earn money, they work and want to get paid. They don't care what the rent is and how much the flour has risen in price. They are not required to be owners. No need to resent them for it. The mindset of an employee and the mindset of an entrepreneur are two different planets)))).

FINDINGS

  1. Even without understanding the recipe, baking, types of baking ovens, I was able to significantly change the business with the help of management tools and make it profitable and interesting. This proves once again that in order to manage a business (up to certain level) enough knowledge in the field of management and entrepreneurship, it is enough to build a sales system and use modern technologies. Many techniques are universal and work in any business. Of course, this does not mean that you do not need to understand the topic. If I knew the intricacies of baking, I'm sure the results would be much better.
  1. Do the business that interests you. Then it will be serious and for a long time. The bakery, to be honest, did not fascinate me. I did not want to devote my free time to this business. The topic of building systems and sales departments, marketing - catches me (I keep my blog with my soul, I'm ready to do this all the time. It's interesting to me). I love my job. But the topic of baking was more of an experiment. Probably, this was the impetus for the sale of the business - when people turned to me with the words “the bakery is the dream of our family. We only want to do this,” I agreed to the sale. At the same time, by the way, the value of the business compared to the original price has almost doubled in about 8 months. It was a very good, profitable deal and invaluable experience in 2016.

These simple tips, mistakes and ideas helped to radically change the situation in business in a few months.

Everything seemed to be simple and clear. But in most businesses, not all of these items are implemented.

For example, I am often approached for scripts to increase the conversion of calls (incoming and outgoing). And when it comes to numbers (how many calls, successful, unsuccessful) - it turns out that no one counts them. Paragraph one of this article ("statistics") is not fulfilled. Likewise with other points.

Sell ​​beautifully and easily and bring your sales to full power!

useful links

  • - a course on how everyone (even a beginner) can build an effective sales system. You will start to attract more customers, you will be able to sell them more, more expensively and more often. Learn how to make promoters (i.e. people who recommend you personally and your company to other clients).
  • - the most important thing in sales in 3 video lessons from the sunny Dominican Republic! In this free mini-course, you will learn the 3 most important secrets of selling in the 21st century. As a bonus, you will receive a mind map with 3 sales secrets. Access for subscribers is free.
  • . These 9 tricks will make your presentation sell on the phone, at a meeting and even in social networks. Download the document for free and get additional diagrams and checklists in the coming days
  • Start with an audit of your sales! It's free and helpful. I will check more than 50 growth points of your sales and send you a PDF report on the results of the audit within 5 days.
  • Youtube channel "It's time to grow"– subscribe now to be the first to get access to new materials;

Revenue growth is a very important indicator that characterizes the efficiency of the enterprise.

Revenue growth is economic indicator, reflecting the change in the amount of income of the enterprise for a certain period of time. In other words, this indicator allows you to see by what percentage the company's revenue increased (decreased) in the reporting period compared to the base one.

The value of the growth rate is determined using the following formula:

Tpr \u003d ((Wo-Wb) / Wb) * 100, where:

  • Tpr – revenue growth rate;
  • In - revenue in the reporting period;
  • Wb - revenue in the base period.

This indicator should be constantly monitored by the management of the organization, since its value allows us to draw a conclusion about the effectiveness of the implementation of the strategic and operational goals of the enterprise.

Investors show particular interest in the level of profitability of the organization. A stable rate of revenue growth has a very favorable effect on the investment climate of an economic entity.

What is he talking about?

First of all, it should be noted that revenue is understood as cash that come to the enterprise as a result of the sale of goods and services. It is this indicator that is the main source of income for an economic entity.

Increasing revenue of the enterprise indicates an increase in sales volumes which in turn depend on the following factors:

Sales volume is a very significant indicator, without the growth of which the company will not be able to secure a sufficient amount of revenue. Wherein sales revenue is the main source of cost coverage incurred by the enterprise in the course of creating a new product (raw materials, materials, maintenance of equipment, remuneration of workers, etc.).

Thus, a systematic increase in income indicates efficient system management in the organization, the ability of management to competently establish production and marketing activities, as well as a positive trend for the enterprise as a whole.

How to increase?

In order to understand in detail the main ways and ways to increase revenue, we will present detailed instructions.


Pace

The growth rate is a very common indicator that is actively used not only in statistics, but also in economics, law, production, etc.

The revenue growth rate is an indicator that reflects the percentage growth in the company's income. in the current period compared to the previous one. In other words, using the growth rate, you can determine how much the organization's income in the current year was as a percentage compared to the previous year.

In the calculation of this indicator, you can use a variety of reporting periods. It can be a month, a quarter, a year, or several years.

Definition formula

So, the formula for calculating the growth rate is as follows:

Tr \u003d In / Wb * 100%, where:

  • Тр is the revenue growth rate;
  • In - revenue in the reporting period;
  • Wb - revenue in the base period.

Procedure and calculation example

In order to more clearly see the procedure for calculating this indicator, we will give a few examples.

Example #1.

The revenue of Zarya LLC in 2016 amounted to 50,000 rubles. In 2015, its size was equal to 38,000 rubles. So let's calculate the growth rate using the above formula.

Tr \u003d 50000 / 38000 * 100 \u003d 131%

From this we can conclude that in 2016 the sales revenue of Zarya LLC amounted to 131% compared to the same indicator for 2015.

Example #2.

In 2016, Eurostyle CJSC sales revenue amounted to 45,000 rubles. At the same time, in 2015 this figure amounted to 68,000 rubles. Let's calculate the growth rate.

Tr = 45000 / 68000 * 100 = 66%

Thus, based on the data obtained, it can be noted that in 2016 there was a decrease in sales revenue from CJSC Eurostyle. Thus, the company received only 66% of revenue compared to 2015.

Summarizing the above, it can be noted that the revenue has key value for the operation of any enterprise. The management of each company is interested in its stable growth. Wherein great importance has a growth rate and an income growth rate, in connection with which, these indicators should be calculated regularly.