How to increase the profitability of the enterprise. How to achieve high business profitability. Additional useful features for customers

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The most accurate assessment of the functioning of any company gives profitability, which is not just a calculated, statistical parameter, but a complex socio-economic complex criterion. It characterizes, in contrast to profit, efficiency financial activities each individual economic entity. Profitability means the profitability, profitability of the enterprise. It is calculated by comparing the profit or gross income with the resources or costs used.

Just follow these simple step by step tips and you will be on the right track.

Brief step by step guide
So, let's get down to action, tuning in to the result.

Step - 1
Profitability shows how profitable the activity of the enterprise is, therefore, the higher the profitability ratio, the more efficient the activity itself. Accordingly, the company must always strive for the highest performance, and management must identify ways to increase profitability.

One of the conditions efficient operation organization is to expand the market for the products offered by reducing prices for manufactured goods. Also Special attention deserve internal factors enterprises: an increase in production volumes, a decrease in the cost of production, an increase in the return on fixed assets.

Having done this, we move on to the next steps.

Step - 2
With low profitability at the enterprise, it is necessary to accelerate the turnover of assets. The return on equity can be increased by increasing the share of borrowed funds in the total capital. At the same time, the return on assets becomes higher, when the profitability of products becomes higher, the return on all outside current assets, the rate of turnover of these current assets, when the total costs per unit of production and the costs of the main economic elements (materials, labor means) are lower. Having done this, we move on to the next steps.

Step - 3
It is impossible to consider abstractly the influence of individual factors, because, as it affects the dynamics and level of profitability indicators, the whole set of production and economic factors: the degree of use of all production resources; level of organization of management and production; the structure of the capital itself, as well as sources; quality, structure and volume of products; costs for the cost of products and production; direction of use of profit. Having done this, we move on to the next steps.

Step - 4
Profit can be directed to the formation of consumption funds and accumulation funds, deductions to reserve capital, diversion for charitable purposes in order to expand the organization's activities at its own expense. However, there is another alternative - you can invest your own own funds in the securities of other larger companies, for example, to form an investment portfolio and competently manage it in order to receive income after some time, which can be invested in your company to improve the competitiveness and financial condition of the enterprise.
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It is generalizing and showing it. After all, a sufficient level of profitability indicates the level of profitability of the enterprise, its profitability. In this regard, increasing the profitability of the enterprise is a key activity for increasing income.

How is calculated by comparing the volume or profit of the enterprise with the costs incurred for production or the amount of resources used. After analyzing the average level of profitability, it is possible to establish which products and which divisions of the enterprise provide the required level of profitability, and which are unprofitable. This information in a competitive market economy is very important, because financial indicators directly depend on the concentration and specialization of production.

Increasing the profitability of the enterprise in a situation of increased competition is a paramount task.

As you know, the main source of free Money enterprise is the proceeds from the sale of manufactured products. In this regard, the key activity of the entity is to increase the profitability of production by reducing costs and observing the savings regime, as well as the efficient use of the resources available to the enterprise.

After all, these costs determine the level of income and the cost structure. The volume of costs for raw materials occupies a significant share, and therefore, increasing the profitability of the enterprise and reducing the cost of manufactured products will significantly affect the increase in profits. Thanks to this, it is possible to get an increase in profits, which will affect the break-even performance of the organization. In addition to reducing the cost of producing goods, increasing the profitability of sales also significantly affects the increase in the number of products sold. In order to increase sales, in addition to marketing activities, such products should be produced that meet the requirements of consumers and will be in stable demand.

Each enterprise must have responsible departments on a permanent basis that carry out an analysis of the cost of manufactured products, as well as a full-scale program to reduce it. It should be comprehensive, take into account all possible factors that affect the formation of production and sales costs.

Measures aimed at optimizing the used working time have a positive impact on increasing the profitability of the enterprise.

These include:

Maintaining the optimal number of working personnel;

Reducing the cost of units that are related and do not participate in production;

Constant work on improving the skill level of employees, through which labor productivity will improve, ahead of the average wages;

Usage progressive systems pay, increasing the interest of workers in improving productivity;

Automation of production processes, which reduces the cost of the wage fund;

Increasing labor motivation.

It is also essential to reduce the amount of overhead costs for operation and management. production process. This is facilitated by the growth of production volumes through the implementation of reconstruction, technical renovation of the enterprise, reduction in the size of the administrative and managerial apparatus and support services, as well as by improving the process of production management.

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The profitability indicator for any type of production is generalizing and showing it. After all, a sufficient level of profitability indicates the level of profitability of the enterprise, its profitability. In this regard, increasing the profitability of the enterprise is a key activity for optimizing costs and increasing income.

How is profitability calculated? The calculation of profitability is carried out by comparing the volume of gross income or profit of the enterprise with the costs incurred for production or the volume of resources used. After analyzing the average level of profitability, it is possible to establish which products and which divisions of the enterprise provide the required level of profitability, and which are unprofitable. This information is very important in a competitive market economy, because financial indicators directly depend on the concentration and specialization of production.

Increasing the profitability of the enterprise in a situation of increase is a paramount task.

As you know, the main source of free enterprise is from the sale of manufactured products. In this regard, the key activity of the entity is to increase the profitability of production by reducing costs and observing the savings regime, as well as the efficient use of the resources available to the enterprise.

These include:

Maintaining the optimal number of working personnel;
- cost reduction for subdivisions that are related and do not participate in production;
- permanent job over raising the level of skills of workers, through which labor productivity will improve, ahead of the average;
- the use of progressive payment systems, increasing the interest of workers in improving productivity;
- automation of production processes, which reduces the cost of the wage fund;
- increase of labor motivation.

It is also essential to reduce the amount of overhead costs for the operation and management of the production process. This is facilitated by the growth of production volumes through the implementation of reconstruction, technical renovation of the enterprise, reduction in the size of the administrative and managerial apparatus and support services, as well as by improving the process of production management.

• How return on sales is calculated
• How managers can calculate the return on sales and how to increase this figure
• How to use the profitability of sales to control pricing policy and costs in the activities of the organization

Profitability of sales most often calculated using one of the following two formulas:

• return on sales = net profit: sales volume × 100%;
• return on sales = operating profit: revenue × 100%, where operating profit = gross profit - operating costs.

I prefer to use the second formula, so I strive to optimize the indicators involved in it. Until now, a number of managers to increase the profitability of sales use only the "old grandfather method" - raising prices. But this method is suitable for monopoly companies.

You spent a lot of time, money and energy on a potential client, and in response you heard: “I need to think.” What to do? Perhaps you need to start with what not to do.

We have selected 8 ways to deal with an objection and increase company sales. You will also find a checklist for checking actions.

Operating in a competitive market, we use a wider range of tools, which allowed us to increase the profitability of sales by 41.74%. I’ll make a reservation right away that each of these methods should be used only if the costs for it do not exceed the benefits from its use.

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How other companies managed to increase the profitability of sales

Offer a choice of a regular or VIP product. So, for example, sellers of books act, offering a book in paperback for 200 rubles. or a deluxe edition of the same book in a beautiful hardcover for 1500.

Add additional features. At Natali Kovaltseva, in order to increase sales margins, economical LEDs and a control panel are added to the standard modification of the lamp - these details increase the value of the product in the eyes of the consumer. As a result, the cost of a batch increases by 15–20%, and profitability by at least 30%.

Select "companion" products and offer them when placing an order. This is what many online stores do now. For example, if you are looking at the description of a pair of shoes in the Sapato.ru store, next to the image of the product you are interested in, you see the inscription “Perfect pair” – the store automatically selects several bags that match the style of these shoes.

Launch new items more often. As a rule, new items are more expensive than samples from the old collection: the market is not yet saturated with them, so you can set a higher price than previous models without looking at competitors. Therefore, the marginality of new collections is higher.

Keep statistics. In 2007, a clothing chain analyzed the profitability of the brands it sold by comparing sales results before and during the sale. The analysis allowed us to identify brands with higher margins. Then all brands were divided into three price ranges, named better, middle and good (English best, average, good). As a result, the company identified brands with higher margins and increased their share of total purchases. According to the results of 2008, the company's income grew by 12%.

Offer an exclusive. The development and production of exclusive collections brings the company more profit than the sale of standard products. For example, when fulfilling an order for a large hotel, Natali Kovaltseva selected lamps based on the latest collection of an Italian manufacturer. The models were reworked (plafonds were changed, another crystal was used), but these products were produced on the same production sites the same as other goods. If fixtures from the standard collection were installed at the facility, the margin would be about 30%. The author's design and exclusive performance allowed the company to increase the margin up to 60%.

Ways to increase sales profitability

Method 1. Price audit

We determine the likely price at which competing companies supply a similar product to their customers (often our customers) based on the shelf price of the product (including markups and bonuses). Having calculated the delivery price, we compare the goods with ours (if, for example, we are talking about jamon or cheese, their aging, waste rate, etc. are compared). Depending on the results of the comparison, we make an offer to the client; it can be both cheaper and more expensive - if our product is better in some characteristics than that of a competitor. All employees of the company are constantly involved in the collection of information. Our owner sometimes comes and says: “I saw such and such a product there, the shelf price is such and such.” This information is then sent to the sales director and pricing specialist for processing and analysis. Price audit data is a reliable guideline and also a good argument in price negotiations with manufacturers.

Method 2. Analysis of marginality in relation to different categories of goods and customers

This is constantly done by a specialist responsible for pricing. The analysis consists in determining the profitability of each commodity item (the weighted average delivery price for different categories of customers is compared with purchase price and stock prices). Duties, VAT, shrinkage, etc. are also taken into account. As a result, we get different margins.

The analysis allows us to divide all products in terms of their marginality into three types (low-, medium- and high-margin). In addition, different clients cooperate with us on different terms: some have bonuses, others do not; Some clients pay in advance, while others take advantage of the delay. As a result, from a client with greater preferences (for example, with a longer delay), we will receive a greater gross profit, but due to the increase in operating costs, we will achieve an average profitability indicator. Therefore, after the initial analysis for different categories of clients, different level prices. This policy allows us to eventually get the weighted average price that suits us.

• Decline in consumer demand: 5 tips to save profitability

Practitioner tells

Irina Chirva, Co-Founder management company networks "Tonus-Club", St. Petersburg

One of our most experienced franchisees found himself in a difficult situation: clients preferred the cheapest season tickets - short-term ones, so the club was full, and it was not possible to collect the planned revenue. After analyzing the situation, the elasticity of demand and the peculiarities of the audience, we proposed to the franchisees to optimize the price list of the club, bringing it in line with the current network-wide standards. To do this, they eliminated actively sold in this club, but not profitable in the long term, subscriptions for one and two months, and also canceled the possibility of one-time visits. Then the cost of a three-month subscription was doubled. In order to retain customers and even attract them to the club for a longer period, we left the price of annual subscriptions at the same level and increased the number of classes included in the subscription price. In addition, the club began to offer those who bought subscriptions for a long time, payment by installments. The last step was the introduction of guest bonuses, which gave each client the right to invite their acquaintances to the club (according to the statistics of our network, most of those who came through such an invitation subsequently purchase their own subscription). It would seem that the increase in the minimum cost of visiting the club should scare away customers. But the revision of the price list was carried out with an understanding of the needs of the audience, and therefore allowed to increase the monthly profit of the club by a third.

Method 3. Motivating managers

We stopped demanding that managers sell as much as possible, and for the second year now our sales departments are focused on a certain level of marginality. Let me explain how it works. Even before the negotiations, our specialist goes to the client, examines its assortment and conducts a price audit. Then, using special add-ons in 1C, the employee predicts the likely sales volume of the client and receives margin data to compare them with the average for this category of clients. Only then, taking into account a lot of factors, the specialist is ready to make an offer that will suit both the company and the client. If later we observe deviations from the predicted sales volumes of a particular product, then we offer the client a new solution.

• Incentive bonus for which employees will work better and better

Four Ways to Influence Managers to Sell for More Profits

1. Fix the maximum discount percentage. To sell cheaper, the manager will have to negotiate an additional discount with the head of the sales department or commercial director. Then less and less profitable sales will be due to plans for further cooperation with a promising client or the promise of the buyer to make a larger order, and not the desire of the manager to fulfill the plan at all costs.

2. Tie the bonus percentage of the manager to the implementation of the sales profitability plan. The percentages accepted in the company for the sale can be multiplied by a certain coefficient so that the manager is also motivated to fulfill the sales profitability plan (this coefficient can vary from 1 to 1.2, for example, 1 for fulfilling the plan, 1.2 for overfulfilling it).

3. Calculate the variable part of the salary as a percentage of the simplified gross income from payments received. For example, when selling goods at a price of 1 million rubles. without discounts, the margin will be 200 thousand rubles, with a 5% discount - 150 thousand rubles, etc. Based on these indicators, it is worth accruing bonuses.

4. Give the manager an incentive to sell particularly profitable products. To do this, you can assign bonuses for the sale of such goods in the amount of two to three times more than for the sale of other items in the assortment.

Method 4. Working with manufacturers

We sell exclusively Spanish products, and the price of delivery from manufacturers is always fixed in contracts. To prevent the supplier from arbitrarily raising the price, we include a “Cost structure” section in the contract. By accepting the terms of this section, he may not increase the price more often than specified in the contract, and without a clear reason. Here is an example. The supplier says, "Electricity costs have gone up by 10%, so we're raising the price by 10%." And the contract states that the share of electricity costs in the cost structure is only 5%. Therefore, the price of the final product can only rise by 0.5%.

A separate topic is transfer prices (they can be set only if you have a strategic partnership or a common owner with the manufacturer). Imagine a situation: you are shipped so many units of some product, you start selling it as a low-margin product, at a certain moment the prices on the market go down, and you incur losses. The natural desire is to withdraw this product from the assortment. But if you are strategic partners with the supplier, you can sit down at the negotiating table, find out its profit margin (for example, 20%) and agree on its reduction (say, up to 10%). We started using this method last year, wanting to remove a number of positions from the assortment that were dragging down the profitability of sales indicator. It was impossible to raise the price: it would become uncompetitive. As a result, we convinced the manufacturer to revise the profit margin for these positions, and everyone was satisfied. Independent suppliers, on the other hand, are rarely willing to disclose margins. If you do not pay due attention to negotiations with manufacturers, you can suffer serious losses. For example, in 2009 prices changed four times, and it was very difficult for us to work. Now everything is easier.

• Sales system: a step-by-step methodology for building and optimizing

Ways to reduce operating costs

Method 5. Managing the commodity flows of customers

In 2010, we opened a mobile merchandising department, whose employees monitor the commodity flows of our customers, including the availability of goods on the shelf and their stock in the warehouse. The day before the order, merchandisers remotely enter all data about the situation of customers from a PDA into our 1C system, where the Mobile Merchandising application is installed. I will give a simple example. Suppose, according to the assortment matrix, there should be 10 units of a certain product on the shelf, but there are only three units, and two more in the warehouse. Therefore, the likely scope of delivery is five units. The next day we receive an order with only one unit. Before entering the order into the system, the manager calls the customer and says that he should order four more units. The work of merchandisers on this principle allowed us to cope with the lack of goods on the shelves and reduce the number of returns. Monthly expenses for this unit, which employs 15 people, amount to 450 thousand rubles. (excluding one-time equipment costs, but including salaries and taxes). The increase in operating costs for the maintenance of the merchandising department is offset by a decrease in operating costs due to a decrease in the number of product losses and an increase in gross profit.

Method 6. Cost reduction

By approving the budget of expenses, we exclude everything that is useless - that which does not contribute to sales growth. In particular, they refused to participate in exhibitions. The company has found more efficient and cheaper ways to address potential and existing customers. For example, targeted mailing, as well as individual presentations at certain periods (before seasonal menu changes in restaurants, when new products are launched, and when the customer matrix is ​​updated). We invite clients to chef master classes and meetings with representatives of manufacturing companies, without tying these events to exhibition dates.

Method 7. Service improvement

Our customers appreciate the regularity of deliveries, fixed prices, the correct execution of accompanying documentation and accurate order fulfillment. Thus, to ensure the regularity of deliveries, we provide key manufacturers with access to data on our inventory and sales plans - this allows manufacturers to clearly plan the stocks of raw materials and other Supplies and prevents failures in the production of products for our orders. In order to be able to fix prices for customers, we determine the range of fluctuations in the exchange rate in which supplies are paid for, for six months or a year. If the rate remains within the corridor, we do not change prices.

• Currency risk management: how to protect your business from rising dollar and euro rates

Increasing profitability of sales: experience of a window manufacturer

Maxim Iskrenev, Deputy General Director group of companies Trend Group, Moscow

A few years ago, I moved from a small manufacturing and trading company in the window market to a more big company the same profile, having taken the position executive director. At first glance, the company was doing well: there were many orders, production volumes were growing. However, having delved into the details, I concluded that the position of the firm is fragile.

In this article, I will explain why the apparently good sales situation caused me concern and what was done in order to strengthen the position of the company.

initial situation

Here are the problems I found when I analyzed the sales system.

1. The company sought to include any novelties in the range, and therefore often changed priorities, expanding its product portfolio.

2. The work of the enterprise was not systematized - many internal regulations were perceived by employees as recommendations, the implementation of which is not mandatory for everyone. Therefore, the company could not predict its success - and therefore, ensure their stability.

3. Top management lacked managerial experience, because of which there was often a serious gap between planned and actual sales results.

4. All attention was paid to sales volume, while profitability was not regulated - goals were set without setting hard thresholds for such important parameters as, for example, production costs and the level of profitability of sales.

5. The company easily attracted new customers but had a hard time retaining old ones: the head of sales was focused on increasing gross income and did not pay due attention to maintaining relationships with existing customers.

The situation was corrected in two stages.

First stage. Implementation of new principles of work for sales managers

1. Regulation of the sales process. Internal regulatory documents have been revised - instead of standard provisions that are poorly adapted to the conditions of our company (very voluminous), we have introduced short step by step instructions for each of the main operations. Moreover, they were adopted “in the third reading”: first, the line managers prepared preliminary versions of the documents, then they were amended at working meetings, and finally, at a general meeting with the participation of representatives of production, delivery services and finance, the final versions were agreed.

2. Linking bonuses to the profitability of the transaction. We have linked seller bonuses to profit, not to sales volume as we used to. In order to encourage managers to promote more expensive window systems that bring the company more margins, we have increased the bonus for their sales. In addition, a reduction coefficient was set for each manager, affecting the entire bonus part - it was applied if an employee fulfilled his sales plan without reaching a given level of profitability. Now the worker could sacrifice profitability to keep one customer, but had to make up for those losses by selling to others at a higher profit. After that, the monthly income of managers who actively sold marginal products increased by an average of 40%. The record was set by our best salesperson, who once earned as much in a month as he used to earn in two and a half.

3. Introduction of bonuses for ensuring customer loyalty. As you know, working with an old client is more profitable than with a new one: attracting a new client requires costs from the company. To increase customer loyalty, thereby increasing the profitability of sales, we have established several rules.

1. Bonuses for sales managers were now accrued only after signing the act of completed work (and not after signing and paying for the contract, as before). In this way, we have ensured that employees are more attentive to customers until the end of the installation. After all, if the customer is satisfied with the service, he becomes loyal.
2. A specially assigned employee was instructed to interview customers by phone the day after installation to find out if they were satisfied with the work of the sales manager, the installation team and the company as a whole. The size of bonuses depended on the results of the survey. For example, a sales manager who was negatively reviewed by a customer could lose up to 25% of their bonus.
3. The manager and foreman of the installers received an additional bonus if a new buyer came on the recommendation of an existing client. The bonus was 10% of the bonus accrued for working with the customer who gave the recommendation.

These measures helped to increase the profitability of sales by 30%. In addition, the number of destructive conflicts that arise due to the fuzzy distribution of responsibilities between sales managers and other employees has significantly decreased.

Second phase. Assortment adjustment

As a result, even leaving unchanged such indicators as the volume of products, prices for it and the number of employees, we managed to increase the profitability of the company. Changes in the assortment and pricing policy allowed us to further increase the profitability of sales.

1. Freeze assortment. We decided to stop the launch of new products, as it destabilized the activities of the transport and purchasing services and turned into a constant stress for the production department, which did not have the opportunity to plan production volumes.

2. Refusal to produce economy class products. We have abandoned the production of standard plastic windows and sliding balcony glazing systems, as this market was highly competitive and was bound to intensify. The acceptable marginality of these products could be maintained by switching to cheaper components, which would inevitably affect the quality.

3. Production of profitable products. Abandoning less profitable products, the company focused on the production of high-margin aluminum systems used in construction (facade systems, entrance groups, etc.). Thus, we staked on taking a strong position in the b2b segment. For private customers, only the production of the most profitable goods was retained - high-quality windows and winter gardens.

The company's profitability of sales almost doubled.

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Ways to increase the profitability of an enterprise - section Economics, Analysis of the profitability of an enterprise Ways to Increase the Profitability of an Enterprise. Profitability Shows Us...

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This topic belongs to:

Enterprise profitability analysis

A more accurate assessment of the functioning of organizations gives profitability. This is not just a statistical, calculated parameter, but a complex complex one .. Unlike profit, it characterizes the efficiency of financial activity .. Profitability means the profitability, profitability of an enterprise. It is calculated by comparing gross income ..

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Tasks of profitability analysis and characteristics of indicators
Tasks of profitability analysis and characteristics of indicators. The overall profitability of associations, enterprises is determined by the ratio of book profit to the average annual cost of the main production

List of used sources. Bakaev M.I. Sheremet A.D. Theory of Analysis economic activity M.: Finance and statistics, 1999. 2. Berkstein L.A. Analysis of financial statements M.: Finance and statistics