Revenue is not an indicator by which one can unequivocally judge the success of an enterprise's activities. The fact is that the most accurate position of an organization in any market should be assessed based on three factors: occupied share, total market capacity and profitability. Therefore, the question of how to increase revenue can be approached from several angles.
Instructions
Step 1
Revenues or sales are determined by multiplying the market share of an enterprise by its total capacity. Based on this, in order to increase revenue, you should work in two directions:
• Increasing market capacity
• Growth of the occupied share.
Step 2
Managing the capacity of the entire market, as a rule, involves global events covering all participants, for example, protecting the industry from the import of competing goods, large-scale marketing support for consumption and other serious financial investments. Most organizations, with the exception of the largest in their industry, cannot afford this market management. Therefore, in order to increase revenue, more attention should be paid to the management of the occupied share.
Step 3
The growth of the occupied share can be achieved through measures in the following areas of activity:
• Expansion of the sales network
• Expansion of the product range
• Price management
Each of these points, with a careful approach, breaks down into several components, a skillful combination of which can ultimately increase the company's revenue and its profitability.
Step 4
Revenue is a purely quantitative indicator. It is not entirely correct to rely only on it and plan activities, putting an absolute indicator at the forefront. In a falling market, revenue will often fall behind it. Planning a stable revenue in a growing market is also impractical if the share of the company does not increase. Also, good revenue does not yet guarantee high profitability, and profitability is the point of carrying out any commercial activity. Therefore, when planning how to increase revenue, do not lose sight of other factors affecting the business environment.
