Ways to increase sales revenue for operations

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hi Tim Stokes in the studio I'd like to talk to you and give you a little preview of a very important subject to do with business and what happens when businesses start to grow a lot of business owners are very focused on marketing the one increases sales get more customers because they believe it's going to make them more money well after watching this short video you may think about that twice so what happens with business is over time to turnover increases and in this example let's say that the turnover is increased from 500 K to 2 million dollars in this time frame and then if we look at the net profit let's say that the net profit has increased from 75,000 to 150 thousand and the business owner was probably feeling pretty good about this look sales are up profits are up business is good I'm having a great life because my business is growing and I'm making more money well that's what they think but the most important number in every business is every entrepreneur knows is the net profit margin now if you divide 75 K into the 500 K you get a 15% figure if you divide the 150,000 into two million you get a 7.5 figure so what's happening in this business as it's growing it looks like it's having a great time that the sales are up the profits are up we're looking at the bottom line business is good but the net profit margin is decreasing now when this starts to happen in the business the business will start to have cashflow problems and they think it's a cash flow problem when in fact that's the symptom the real problem is the net profit margin is decreasing and they're not really watching the percentage they're looking at the dollars and they're getting fooled into believing it so they're not sure why because profits are up business should be better but because net profit margins going down this business is hemorrhaging this business is heading into a financial crisis potentially bankruptcy or major cash flow issues and if they lost one of their major customers or had a customer or big customer that didn't pay them on time they may run out of cash and that's the end of the business so is a very big trap for businesses don't be just focus on customers marketing marketing customers start thinking about what your net profit margin is start thinking about net profit margin increasing strategies and if you'd like to know more tune in to the webinar that's coming up soon and you can find it a lot more about this subject and a whole lot more to do with entrepreneurial thinking and entrepreneurial success in business thanks for your time