Increasing the profitability of the business. Increasing the profitability of an enterprise is a guarantee of its stability. Assessment of the return on investment attraction

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

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

Quick step-by-step guide
So, let's get down to action, tuned in to the result.

Step -1
Profitability shows how profitable the activity of the enterprise is, therefore, the higher the profitability ratio, the more effective the activity itself. Accordingly, the company should always strive for the most high rates, and management should identify ways to improve profitability.

One of the conditions for the effective activity of the organization is the expansion of the sales market for the offered products by reducing the prices of manufactured goods. Also special attention internal factors of the enterprise deserve: an increase in production volumes, a decrease in production costs, an increase in the return on fixed assets.

Having done this, we proceed to the next steps.

Step -2
With low profitability at the enterprise, it is necessary to accelerate the turnover of assets. Recoil equity capital can be increased by increasing the share of borrowed funds in total capital. At the same time, the profitability of assets becomes higher when the profitability of products becomes higher, the return on all non-current assets will also be higher, 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, means of labor). Having done this, proceed to the next steps.

Step -3
It is impossible to consider in an abstract way the influence of individual factors, because, as the entire set of production and economic factors influences the dynamics and the level of profitability indicators: the degree of use of all production resources; the 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 goods and production; direction of use of profit. Having done this, proceed to the next steps.

Step -4
The profit can be directed to the formation of consumption funds and accumulation funds, deductions to reserve capital, diversion to charity, in order to expand the activities of the organization at its own expense. However, there is another alternative - you can invest your own own funds in securities other larger companies, for example, to form an investment portfolio and competently manage in order to get income after a while that can be invested in your company to improve competitiveness and financial condition enterprises.
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As noted above, profit is the final indicator of the activities of enterprises in the industry. It is also the most important economic indicator... However, the profit does not show, does not characterize at what price it was achieved, by what size of funds. The profit does not reflect the size of the production potential with which it was received.

To compare the amount of profit and the amount of funds used to achieve it in the sectoral economy, the profitability indicator is used.

The profitability of production is the most generalizing, qualitative indicator of the economic efficiency of production, the efficiency of functioning of enterprises in the industry. The profitability of production just commensurates the amount of profit received with the size of those funds - fixed assets and circulating assets, with the help of which it was obtained. These means used in production for obtaining a certain profit are, as it were, its price. And the lower this price, i.e. the less funds required for the same amount of profit, the more, of course, more efficient production, and the enterprise operates with great effect. All of the above is true in the absence of a fixed profitability, approved in a number of regions to maintain a certain price level. Over time, this should not be.

Production profitability in the very general view in the sectoral economy is defined as:

where Р - profitability, %

P is the amount of profit, rubles.

OF - the cost of fixed assets, rubles.

OS - the cost of working capital, rubles.

The period of operation of the enterprise can be different - month, quarter, year, and therefore the cost of fixed assets and working capital is calculated on average. The profitability of production can generally be determined in any range of time, in any period of the target functioning, in order to know the efficiency of the production operations carried out. As a rule, in case of stable operation, it is calculated per quarter and per year.

In the sectoral economy, a distinction is made between the general and calculated profitability of production. The overall profitability is almost the same as the previously determined profitability:

Profit is taken in the form of a total, balance sheet amount, and the cost of working capital was determined before its normalized part, which is incorrect. It is necessary to take into account the entire used value of circulating assets - own and borrowed.

Estimated profitability as an indicator of efficiency has lost its meaning and, in fact, has no practical significance. It can only characterize at what price, the amount of what means the profit is obtained, which remains at the disposal of the enterprise.

Of much greater interest is the indicator of profitability of products, calculated as the ratio of profit to the total cost of production:

where Ри - product profitability, %

P - profit from product sales, rubles.

Cn is the total cost of production, rubles.

If the product is one, then the formula takes the form:

where C is the unit price

Cn is the total unit cost of a given product.

And the profitability of all sold (manufactured) products is calculated as the ratio of all received profit from the sale of products to the total cost products sold.

This indicator is very important for making current and strategic decisions. The specified indicator in the course of the analysis shows the profitability or unprofitableness of manufactured products, the degree of their profitability and loss ratio. In a market where the goal is business activities - getting the maximum profit, after such an analysis, the enterprise must make an appropriate decision - get rid of unprofitable and low-profit products and, conversely, increase highly profitable types of products. If the industry is subsidized or certain products are subsidized, then certain adjustments should be made.

Profitability analysis certain types products, as well as its entire aggregate, will help to identify internal reserves for reducing the cost of production, ways to improve product quality for a possible corresponding increase in prices, which in any case will increase the profitability of products, and therefore improve the financial, socio-economic situation of the industry enterprise.

As can be seen from the general formula for profitability of production

its growth factors will be:

1. Amount of profit

2. Cost and efficiency of using fixed assets.

3. The cost and efficiency of using working capital

The higher the profit, the lower the cost of fixed assets and working capital, it is achieved and the more efficiently they are used, the higher the profitability of production, which means the higher the economic efficiency of the industry. And vice versa.

Thus, the main ways of increasing it follow from the factors of production profitability.

In the sectoral economy, the following are the most generalizing ways to increase the profitability of production.

1. All ways that increase the amount of profit.

2. All ways to improve the efficiency of the use of fixed assets.

3. All ways to improve the efficiency of using working capital.

In economic practice, many specific indicators of profitability are used. They all play a certain role in the economy. However, for the sectoral economy, for a general view of economic processes the indicators presented here are quite sufficient and correct.

With a normally functioning economy, the level of profitability of production in industry is in the range of 20-25%, and agriculture - 40-50 %.

Introduction

Profit is a multivalued economic category. The efficiency of commercial calculation, pricing and other economic levers of management depends on the depth of its knowledge and rationality of its use. As a source of production and social development, profit takes a leading place in ensuring self-financing of enterprises and associations, the possibilities of which are largely determined by how much income exceeds costs.

Profit is a generalizing effective indicator of the production and financial activity of the enterprise and the source of financial savings is profit. There is a lot of compelling evidence in the economic literature important role profit as an indicator that expresses the long-term development goals of the economic activity of the enterprise; acts as a source of life for the enterprise, the basis for self-financing of the enterprise.

But in order to assess how efficiently an enterprise uses resources, it is necessary to correlate profit and costs, that is, to determine profitability.

Analysis financial results allows you to identify the reserves of increasing profits and profitability of the enterprise.

As a consequence, profit analysis has an important practical solution... It allows you to identify the main factors of its growth, efficient use resources, potential capabilities of the enterprise, as well as determine the impact of external and internal factors on the amount of profit, the procedure for its distribution.

The aim of the work is to analyze the profit and profitability of the LLC "Stroimaterialy" enterprise and to find ways to increase them.

To achieve this goal, it is necessary to solve the following tasks:

studying the essence of profit and the main indicators of profitability;
identifying the main economic factorsinfluencing the indicators of profit and profitability and their analysis;
determination of ways to increase profitability at LLC Stroymaterialy.

The essence of profit, its functions, types

Financial performance indicators characterize the efficiency of the enterprise. The most important such indicators are profit and profitability.

Profit is one of the main indicators for planning and evaluating the financial and economic activities of an organization.

Profit is the end result of entrepreneurial activity, in general terms, representing the difference between the proceeds from the sale of products and the cost of goods sold.

Profit is generated by comparing income and expenses. The income and expenses of the organization are presented in Fig. one.

The essence of profit is expressed in its functions. Profit functions are shown in Fig. 2.

When costs exceed revenues, a business entity suffers losses - this is an area of \u200b\u200bcritical risk, which puts an economic entity in a critical financial position, not excluding bankruptcy. However, they also play a role. Losses highlight errors and miscalculations in the directions of the use of funds, organization of production and sales of products.

Consequently, profit is a source of income not only for the enterprise, its owners, employees, but also for the state. That is, the more efficient the economic activity, the greater the profit and, consequently, the more funds can be used to finance expanded production, social development and material incentives for workers.

Analysis of profitability indicators

Profit indicators characterize the absolute efficiency of the economic activity of the enterprise. However, the effectiveness and economic expediency the functioning of the enterprise. It is estimated not only by absolute, but also by relative indicators.

Therefore, to characterize the financial condition of the enterprise, it is advisable to measure the amount of profit received with the cost of those elements that contributed to its receipt. This is achieved by using a profitability metric. Profitability is a relative indicator that characterizes the degree of use of the resources available to the enterprise and the efficiency of these costs.

The economic essence of profitability can be disclosed only through the characteristics of the system of indicators (see table 1).

The results of the analysis of profitability indicators are summarized in Table 6:

Table 6 - Main indicators of profitability

Indicator name	Indicator value	Deviation (+ -)	Growth rate, %


Sales proceeds, thousand rubles
Full cost of goods sold, thousand rubles
Profit from sales, thousand rubles
Balance sheet profit, thousand rubles
Average value of total assets, thousand rubles
Average value of non-current assets, thousand rubles
Average equity capital, thousand rubles
Average long-term liabilities, you log.
Return on sales,%
Operating profitability,%
Return on assets,%
Fund profitability,%
Return on equity,%
Return on permanent capital,%

Table 5 shows that in 2007 compared to 2006, there was an increase in almost all indicators of profitability, except for the return on equity. This indicator in 2007 decreased by 0, 18%, which is assessed negatively, since it indicates a slowdown in the turnover of the company's equity capital. The profitability of sales in 2007 compared to 2006 increased by 2.01%, which indicates an increase in the efficiency of using the resources available at the enterprise.

There was also an increase in the profitability of core activities by 2.68%, which indicates an increase in the efficiency of resource use.

The return on assets increased by 0.04%, which indicates an increase in demand for manufactured products, therefore, the company has a guarantee that the products it produces will be sold.

Since in 2007 the rate of return on assets also increased by 0, 27%, therefore the enterprise has increased the efficiency of using fixed assets, as well as other non-current assets.

The increase in the profitability of permanent capital indicates an increase in the efficiency of the use of capital investments.

Ways to Increase Profit Profitability

Growth factors for any indicator of profitability depend on common economic phenomena and processes. This is primarily:

Improving the production management system in the conditions market economy on the basis of overcoming the crisis in the financial, credit and monetary systems;

Improving the efficiency of resource use by enterprises based on the stabilization of mutual settlements and the system of settlement and payment relations;

Indexation of working capital and a clear definition of the sources of their formation.

An important factor in the growth of profitability in the current conditions is the work of enterprises to save resources, which leads to a decrease in production costs, and, consequently, to an increase in profits. The fact is that the development of production by saving resources for this stage much cheaper than the development of new deposits and the involvement of new resources in the production.

Reducing the cost should become the main condition for the growth of profitability and profitability of production.

Profit as the main result of entrepreneurial activity meets the needs of the enterprise itself and the state as a whole. The amount of gross income is influenced by a combination of many factors that depend and do not depend on entrepreneurial activity.

Important factors of profit growth that depend on the activities of enterprises are:

Growth in the volume of products manufactured in accordance with contractual terms;

Reducing its cost;

Quality improvement;

Improvement of the assortment;

Improving the efficiency of using production assets;

Labor productivity growth.

Factors that do not depend on the activities of the enterprise include:

Changes in state regulated prices for products sold;

Influence of natural, geographical, transport and technical conditions for the production and sale of products, etc. - a change in the tax and depreciation policy of the state.

In this article, you will learn:

How to achieve high profitability of your business in sales

What are the rules to increase business profitability

Today you can find a huge amount of literature and trainings containing answers to a question that worries every entrepreneur, namely - how to achieve high business profitability... However, by no means all advice from experienced businessmen is universal: you are unlikely to find a magic scheme that instantly solves existing problems with profitability. Nevertheless, a couple of tips on the level of business profitability will not hurt anyone, especially when it comes to aspiring businessmen.

Why it is necessary to achieve high business profitability

The return on sales in business is based on the percentage of the profit share of each currency earned. Therefore, the profitability of sales is the ratio of the business's net profit to the amount of proceeds from the sale of products multiplied by 100%.

A clear formula for calculating the return on sales:

Return on sales \u003d net income / sales x 100%.
Return on sales \u003d operating income / revenue x 100%.

To better understand what constitutes business profitability, you need to have an understanding of the following:

Return on sales provides an opportunity to see the real picture of the sale of the main products of the business. The share of the cost price in general scheme sale of goods.
Profitability of sales is an excellent help in controlling the pricing policy and costs of the company. Each firm has its own strategies and techniques, so their profit margins tend to be unequal, even when they have the same revenue, operating income, and tax-free profit.
The return on sales does not show the planned effect of long-term investments. When a firm wants to change technological system or purchase innovative equipment, the profitability ratio of the business may decrease slightly. However, with the right modernization strategy, it will quickly return to its original values \u200b\u200bor even grow.

What mistakes will not allow you to achieve high business profitability

Often (namely, in 85% of cases) it happens that a businessman is ready to close his company if it is unprofitable or the profit received only covers expenses. Usually such indicators are typical for small and medium-sized businesses in the first year of their existence. However, according to statistics lion's share the reasons why a firm is running at zero or making losses are the shortcomings or mistakes of these same entrepreneurs in doing business.

Business planning mistake... When the businessman himself starts planning, he prescribes potential expenses with a wide range. But it must be remembered that both overestimation and underestimation of them is critical, since in case of overestimation, the businessman has to withhold the amounts that could be useful to him for another item of expenditure. An illustrative example: an entrepreneur plans to start an advertising campaign soon, but having laid on this much more moneythan necessary, he will have to take money from another expense item, for example, from money for the salaries of workers.

In the question of how to achieve high profitability of the business, you need to constantly go back a little and review the decisions that were made earlier.

The second common mistake of novice businessmen lies in the unjustified understatement of prices for their services or goods. Often a businessman really wants to show that his approach to pricing is very democratic, while forgetting about turnover, and in fact it is only indirectly interconnected with issues of pricing policy. And the price reduction without the cost of marketing business promotion most often negates all the efforts of the company. When advertising campaign was carried out, and this led to an increase in consumer flow, its further decline may be caused by the actions of competitors who have taken similar actions.

The third stage in deciding how to achieve high business profitability is the need consideration of labor productivity. Criteria such as the qualifications of employees, their skills and the level of motivation in increasing the company's turnover are quite influential on the business. The easiest way to motivate staff is financial. The ability to pick up a tip will increase the friendliness and helpfulness of the waiters, paying a percentage of the proceeds to the seller will make him recommend more items to the buyer.

Another productive option: the possibility of continuous financial growth and a clear system of identification best workers... All kinds of "Boards of honor", payment of bonuses for the month, gifts for the holidays are effective.

The main stereotype that hinders business development is definitely lack of advertising. No one will argue that a successful product and business does not really need active promotion, but even a very profitable enterprise at some point may find itself in a situation where the marketing activity of competing firms forces the buyer to go over to their side. Here it is already necessary to focus on the correct and effective marketing promotion of the business.

How to achieve high business profitability

It is very effective if your company can offer a choice of conventional and VIP products... Booksellers usually turn to this scheme, offering to purchase not only an ordinary book for 250 rubles, but also a more expensive one in gift design, for example, for 1500 rubles.

An excellent option was offered by a lighting store: to increase sales margins, the store began to offer standard lighting fixtures along with economical LEDs and a control panel. Such a configuration is more interesting and more attractive for the buyer, despite the fact that its cost has increased by 15–20%, the profitability has become 30%.

During checkout, you need to offer related products... This rather effective scheme is applied successful online stores... The user scrolls through the directory, and in parallel is shown to him, for example, additional item, which is called "perfect match": for example, when ordering a bag, the service itself will make a selection of accessories in harmony with it.

It is necessary to regularly update the assortment, replenishing it with new products, which, as a rule, are more expensive than the products of past collections.

Keep statistics.Somehow network managers shopping centers analyzed the profitability of brands in their catalog. They compared pre-sale and in-time sales. The analysis revealed the brands with the highest profitability levels. After that, three groups of brands were identified - with good, average and best profitability. Thus, the store was able to identify brands with high profitability, and their share in purchases increased. This resulted in a 12% return on sales.

Offer exclusive... If you offer exclusive offers, it will help you significantly increase your revenue when compared to standard offers. These are, for example, exclusive manufacturing of goods and author's products. For example, a lighting manufacturer was able to increase its profitability by 30%, achieving a level of 60%.

How to achieve high business profitability: 6 ways

Selling a product with a higher value.

Initially, the buyer should be interested in a good and inexpensive product from China: he will be happy with such a purchase. But such profitability cannot be called high, and it is also problematic to make a good mark-up. Therefore, you need to deal with the sale of goods of a higher price category, and in order for the profitability of their sales to be high, you need to focus on building personal relationships with the client. Therefore, you need to find out what the buyer thinks about such a product.

A vivid example can be given: some time ago, a successful franchise found itself in a difficult situation - customers began to purchase inexpensive season tickets for short time... Because of this, the hall was constantly overcrowded, but it was not possible to receive the proceeds that were expected according to the plan. Then the hall stopped selling one-time subscriptions and doubled the cost of the subscription by three months. That is, the focus has shifted to long-term subscriptions. So the hall kept the prices for subscriptions and even increased the number of visits provided for them.

Two more services were added: payment by installments for those who purchase a subscription for long term, and providing customers with guest bonuses. What it means: each client can invite friends to a training session for free. Usually, after such a guest visit, the client purchases a subscription for several classes.

Motivation of managers.

To make a low-priced sale, the manager needs to contact the commercial director or the head of the sales department for an additional discount. Then a high profitability of the business can be achieved with the help of plans for further work with prospective clients or the promise of large orders, but not by the manager's desire to achieve the plan by all means.

The manager's monetary incentives should be made dependent on his fulfillment of the business profitability plan. For example, the percentage of sales that is provided by the company should be multiplied by a certain coefficient, such a scheme will help to motivate managers to fulfill the plan. This figure can range from 1 to 1.2. And, let's say, if the intended result is achieved, the coefficient will be equal to 1, and if overfulfilled, it will be 1.2.

Managers need to explain that it is more productive to sell the most profitable goods (their price is 2-3 times higher than the price of other goods). And to solve this problem, you can set bonuses that will be awarded when they are sold.

Service level.

To achieve high profitability of a business, it is necessary to increase the value of goods by increasing their value.

To increase the value of goods, you need:

Provide free shipping.
Debug clear delivery.
Train partners in sales.
Simplify the ordering scheme through the company's website, issue personal Area for wholesale buyers.
Hire friendly and competent consultants (or conduct training for those already working).

Increase in the number of items in the check.

To achieve high profitability of the business, you can expand the check - this is a significant parameter for the seller. This can be most clearly shown by the example of b2c market sales.

It is possible to increase the number of goods in the check if you stand in the client's place: it is important to assume what problems the purchase of goods may be associated with, or what, on the contrary, will interest him (that is, what related goods can be extended to the check). It is important to show initiative: the buyer's trust is precisely manifested in the fact that he makes a purchase from you. Than more sales you commit, the easier you will exercise each successive one.

Reduced costs.

When agreeing on a budget for expenses, exclude things that will not in any way affect the increase in sales, for example, participation in exhibitions. Instead, we will focus on relationships with consumers, including potential ones. Conduct targeted mailing, customized presentations, and more.

Increase in product prices.

A method that needs the utmost care in its implementation. It should be understood that significant changes in the pricing policy in business can cause stress for customers, therefore they can opt for buying a more stable product. But even with the increased price of brand all the same, there will be customers who are ready to give literally any money for its products.

How the ROI is calculated
How managers can calculate the return on sales and how to increase this indicator
How to control the pricing policy and costs in the activities of the organization with the help of profitability of sales

Return on sales is most often calculated using one of the following two formulas:

return on sales \u003d net profit: sales volume × 100%;
return on sales \u003d operating profit: revenue × 100%, where operating profit \u003d gross profit - operating costs.

I prefer to use the second formula, so I aim to optimize the metrics involved in it. Until now, a number of executives use only the “old old-fashioned method” - raising prices to increase profitability. But this method is suitable for monopoly companies.

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

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

Working for competitive market, we use a wider range of tools, which allowed us to increase our return on sales by 41.74%. I will make a reservation right away that each of these methods should be used only if the costs for it do not exceed the benefits of using it.

YOU ARE AVAILABLE FOR THE VIDEO OF THE MASTER CLASS OF ALEXANDER LEVITAS

"GUARDIAN MARKETING: BASIS OF MARKETING WITHOUT BUDGET".

How other companies have managed to increase their ROI

Offer a choice of a regular or VIP product. So, for example, booksellers do when they offer a paperback book for 200 rubles. or a deluxe edition of the same book in a beautiful hardcover for 1500.

Add additional features. Natali Kovaltseva adds economical LEDs and a control panel to the standard luminaire modification to increase the sales margin - these details increase the value of the product in the eyes of the consumer. As a result, the cost of a batch grows by 15–20%, and the profitability - by at least 30%.

Pick up satellite products and offer them when placing an order. Many online stores are doing this 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 will see the inscription “Perfect match” - 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 back at competitors. Therefore, the marginality of new collections is higher.

Keep statistics. In 2007, a chain of clothing stores analyzed the profitability of the brands sold by comparing the sales results before and during the sale. The analysis made it possible to identify brands with higher margins. Then, all brands were categorized into three price ranges called better, middle and good (best, average, good). As a result, the company identified brands with higher margins and increased their share in total purchases. By the end of 2008, the company's revenues increased 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, focusing on the latest collection of an Italian manufacturer. The models underwent processing (the shades were changed, another crystal was used), but these products were produced at the same production sites as other goods. If lamps from a standard collection were installed on site, the margin would be about 30%. The author's design and exclusive execution allowed the company to increase its marginality up to 60%.

Ways to Increase Your ROI

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 margins and bonuses). After calculating the delivery price, we compare the product with ours (if, for example, we are talking about ham or cheeses, compare their aging, waste rate, etc.). Depending on the comparison results, we make an offer to the client; it can be either cheaper or more expensive - if our product is better in some characteristics than a competitor's. All employees of the company are constantly collecting 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 the pricing specialist for processing and subsequent analysis. Price audit data is a reliable guideline, as well as a good argument in price negotiations with manufacturers.

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

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

The analysis allows us to divide all products in terms of their margins into three types (low, medium and high margin). Besides, different clients cooperate with us on different terms: some have bonuses, others do not; some clients make an advance payment, others use a deferral. As a result, we will receive a large gross profit from a client with greater preferences (for example, with a longer grace period), but by increasing operating costs we will reach the average profitability indicator. Therefore after primary analysis different price levels are assigned for different categories of customers. This policy allows us to ultimately get the weighted average price that suits us.

Reducing consumer demand: 5 tips to save profitability

Practitioner tells

Irina Chirva, Co-founder management company network "Tonus-club", St. Petersburg

One of our most experienced franchisees found himself in a difficult situation: clients preferred the cheapest season tickets - short-term, so that the club was overcrowded, and the planned revenue could not be collected. After analyzing the situation, the elasticity of demand and the characteristics of the audience, we suggested the franchisee to optimize the club's price list, bringing it in line with the current network-wide standards. To do this, they liquidated the subscriptions for one and two months, actively sold in this club, but not profitable in the long term, 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 have left the price of annual subscriptions at the same level and increased the number of classes included in the cost of the subscription. In addition, the club began to offer those who bought season tickets 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 friends to the club (according to the statistics of our network, the majority of those who came by such an invitation subsequently purchase their own subscription). Seemingly raising minimum cost 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 made it possible to increase the club's monthly profit by a third.

Method 3. Motivation of managers

We stopped requiring managers to sell as much as possible, and for the second year now, our sales teams are focused on a certain level of marginality. Let me explain how it works. Even before negotiations, our specialist visits the client, examines his assortment and conducts a price audit. Then, using special add-ons in 1C, the employee predicts the likely sales volumes of the client and receives data on the margin in order 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 subsequently we observe deviations from the forecasted sales volumes of one or another product, then we offer the client a new solution.

Incentive reward for which employees will perform better and better

Four ways to influence managers to sell more profitably

1. Record the maximum discount percentage. To sell cheaper, the manager will have to agree on an additional discount with the head of the sales department or commercial director... Then all less profitable sales will be due to plans for further cooperation with a prospective client or a buyer's promise to make a larger order, and not a manager's desire to fulfill the plan by all means.

2. Tie the bonus percentage of the manager to the fulfillment of the sales profitability plan. The sales percentages accepted in the company can be multiplied by a certain coefficient, so that the manager has the motivation 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 simplified gross profit from payments received. For example, when selling a product 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 adding bonuses.

4. Give the manager an incentive to sell highly 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 delivery price from the manufacturers is always fixed in contracts. To prevent the supplier from arbitrarily raising the price, we include in the contract a section "Cost structure". By accepting the terms of this section, he cannot raise the price more often than stipulated in the contract, and without an obvious reason. Here's an example. The supplier says: "Electricity costs are up 10%, so we are raising the price by 10%." And the contract states that the share of electricity costs in the cost structure is only 5%. Consequently, 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 with the manufacturer or have a common owner). Imagine a situation: you are shipped so many units of a 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 remove this product from the range. But if you are strategic partners with the supplier, you can sit down at the negotiating table, find out his rate of return (for example, 20%) and agree to reduce it (say, up to 10%). We started using this method last year, wanting to remove from the assortment a number of positions that were dragging down the profit margin. It was impossible to raise the price: it would become uncompetitive. As a result, we convinced the manufacturer to revise the profit margins for these items, and everyone was happy. Independent suppliers are rarely willing to disclose profit 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. It's easier now.

Sales system: a step-by-step method of building and optimization

Ways to Reduce Operating Costs

Method 5. Managing customer product flows

In 2010, we opened a mobile merchandising department, whose employees monitor the flow of goods of our customers, including the availability of goods on the shelf and its stock in the warehouse. Merchandisers remotely enter all data about the situation with clients from the PDA into our 1C system, where the Mobile Merchandising application is installed. Let me give you 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 are in the warehouse. Therefore, the likely delivery volume 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 client 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. The monthly costs for this unit, which employs 15 people, amount to 450 thousand rubles. (excluding one-time equipment costs, but including salary and tax costs). The increase in operating costs for maintaining 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. Reducing costs

By approving a budget for expenses, we eliminate 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, point mailing, as well as individual presentations at certain periods (before the seasonal menu change in restaurants, when new products are launched and at the time when the customer matrix is \u200b\u200bupdated). We invite clients to master classes of chefs and meetings with representatives of manufacturing companies, without tying these events to the dates of exhibitions.

Method 7. Improving the service

Our clients value regular deliveries, fixed prices, correct design accompanying documentation and clear order execution. So, to ensure the regularity of deliveries, we provide major manufacturers with access to data about our commodity stocks and to sales plans - this allows manufacturers to clearly plan stocks of raw materials and other supplies and prevents disruptions in the production of products for our orders. In order to be able to fix prices for clients, we define a fluctuation band for the currency in which deliveries are paid 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

Boosting your profitability: the window manufacturer's experience

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

Several years ago, I moved from a small production and trading company operating in the window market to more large company of the same profile, taking the position executive director... At first glance, the enterprise was doing well: there were a lot of orders, production volumes were growing. However, having delved into the details, I concluded that the firm's position was fragile.

In this article I will tell you why the seemingly good sales situation raised my concerns and what was done to strengthen the company's position.

initial situation

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

1. The company strived to include any new items in the assortment, 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, due to 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 sales profitability.

5. The company easily attracted new customers, but hardly retained old ones: the head of sales was focused on increasing gross income and did not pay enough attention to maintaining the relationship with existing customers.

The situation was rectified in two stages.

First step. Introducing new principles of work for sales managers

1. Regulation of the sales process. Internal regulatory documents were revised - instead of standard, poorly adapted to the conditions of our company (very voluminous provisions), we introduced short step by step instructions for each of the basic operations. Moreover, they were adopted "in the third reading": first, line managers prepared preliminary versions of documents, then at working meetings they made amendments, finally, to 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 deal. We linked seller bonuses to profits rather than sales volume as it used to be. 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, for each manager, a reduction factor was established that affected the entire bonus part - it was applied if the employee fulfilled his sales plan without reaching the specified level of profitability. Now the employee could sacrifice profitability to retain one client, but had to recoup those losses by selling to others at a higher profit. After that, the monthly income of managers who actively sold margin products grew by an average of 40%. The record was set by our the best seller, who once earned as much in a month as he previously earned 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 your ROI, we have set a few rules.

Bonuses to sales managers were now accrued only after the signing of an act of completed work (and not after signing and paying for the contract, as before). Thus, we ensured that the employees were more attentive to customers until the end of the installation. After all, if the customer is satisfied with the service, he becomes loyal.
A dedicated employee was tasked with questioning customers by phone the day after installation to see if they were comfortable with the sales manager, installation team, and the company as a whole. The size of the 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 his bonus.
The manager and foreman of the installers received additional bonusif a new buyer came on the recommendation of an existing client. The bonus was 10% of the bonus accrued for work with the customer who made the recommendation.

These measures helped to increase the return on sales by 30%. In addition, the number of destructive conflicts arising from the unclear distribution of areas of responsibility between sales managers and other employees has significantly decreased.

Second phase. Assortment adjustment

As a result, even leaving unchanged such indicators as production volumes, prices for them and the number of employees, we managed to increase the company's profitability. The change in the assortment and pricing policy allowed us to further increase the profitability of sales.

1. Freezing the assortment. We decided to discontinue new product launches as it destabilized transportation and procurement and presented constant stress to the production department, unable to plan production volumes.

2. Refusal to release economy class products. We abandoned the production of standard plastic windows and sliding balcony glazing systems, as this market was highly competitive, and competition in it was only going to intensify. Acceptable margins of these products could be maintained by switching to cheaper components, which would inevitably affect the quality.

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

The company's profitability has almost doubled.

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