How to know if a business is profitable
Posted on 04/06/2019
It is common to go through difficult seasons in the different franchises or businesses that exist, the market and the purchasing power vary frequently. Competition can increase, more eye-catching prices and more innovative products or services appear. Having a business that does not represent a significant gain or a sufficient contribution can be a waste of energy and investment.
The internal metrics will always give you a clue how you should proceed with your venture or franchise, here you can detail costs and achievements.
Among the points to take into account, we must observe and analyze "the return on investment and also the compliance of indicators or KPIs of all areas of the company; with this compliance, there is an alignment with the goals and the strategy designed for the business exercise, "advises Jorge Bojacá, a professor at the Department of Marketing at the Central University.
According to Bojacá, it will always be important "to establish the criteria of 'health' of a business, namely, sales, expenses, the number of customers and the average purchase per customer."
The level of satisfaction that customers have about your product or service will be decisive to know if your business is generating results and is sustainable.
Ricardo Prada, professor of the Administration faculty of the EAN University, affirms that "with measurements through surveys or simply asking for suggestions and recommendations to random clients, it will be possible to understand the degree of acceptance that the clients give to the product and / or deal".
"It is important to stay at the forefront of the market, because often the falls in business, are due to the market has changed and these low profitability can be a signal to introduce new products that are in demand," says Prada.
What satisfaction does your business bring? It is necessary that you ask yourself this question, because your personal and financial tranquility must go hand in hand with good results. Evaluate the figures that your company generates and analyze if it is prepared to pass moments of low sales. If you overcome any risk, you are on the right track.
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