Income is a measure of business performance. The higher the income, the more successful the activity of the enterprise or entrepreneur. In addition, this indicator is used for the development of the enterprise. Therefore, in order to work more successfully, you need to increase your income in the market.
There are only three ways to increase revenue in the market - reducing costs, increasing sales, and increasing product prices.
Reduced costs
This method of increasing income is not the most effective, since it is very difficult to reduce costs without losing product quality. The main ways to reduce costs are to reduce labor costs, reduce administrative costs, reduce the total cost of production through the use of cheaper raw materials, and reduce transportation costs.
A very large item of expenditure is the remuneration of employees. As a market owner, you pay the service staff. If you reduce the labor intensity of their work, while increasing labor productivity, then you can achieve positive income dynamics. The most effective way to do this is by automating the process and introducing new technologies.
But all this does not guarantee a high result, while the costs of automating the process will be large. And at the same time, it will be necessary to carry out measures to improve the organization of labor.
It is quite difficult to reduce the cost of production. Suppliers only raise prices for their goods. Transportation costs are also constantly increasing, as fuel prices are constantly rising.
Increase in sales
The higher the sales, the higher the income, and it doesn't matter who you are - the owner of the market or the owner of one outlet. In order to increase sales, you need to improve the quality of products and their volumes. And this will again require funds. With the availability of funds, you will not only increase your income, but also reach a new level of sales.
You can also increase sales with a competent advertising campaign. In this case, advertising costs will be required, and quite large ones. The promotion will help increase the number of buyers, which will lead to more sales. It should be noted that advertising costs do not always justify themselves, since advertising does not always attract customers.
Acceleration of capital turnover sometimes leads to higher sales. This method does not require any financial investments. However, this method can lead to a rapid depreciation of working capital.
Price increase
Increasing prices is the most common way to increase income, but not always justified. It does not require any costs, however, it is not always effective. A sharp increase in price can lead to a sharp decline in sales, which in turn will lead to a decrease in income.
Price increases are only justified when your products are competitive and in high demand. If you decide to resort to this method, then you should carefully study and analyze the market conditions. Otherwise, you can lose customers and, accordingly, income.
