Many business make the mistake of focusing more on cost reduction than increasing their revenue. You can’t cut your costs to success. Yes, it makes sense to be prudent but your focus should always be on increasing revenue. Of course, keeping costs down should still be a top priority. If you want to grow your business, you must make a commitment to growing revenue. You can only cut so much in expenses, but you have so much to gain from increased revenue. You should focus on increasing your revenue while maintaining your expenses.

For example, let’s say your company generates $2 million per year and there is 50% profit margin, meaning $1 million goes to expenses and the other $1 million is your profit.

Annual Revenue $2,000,000
Expenses $1,000,000
__________________
Profits $1,000,000

If your company can increase revenue by 10 percent while maintaining expenses at the same level, 100 percent of the additional revenue dollars will go to the partners. As a result, profits would be $1,200,000.

Annual Revenue $2,200,000
Expenses $1,000,000
__________________
Profit $1,200,000

As the above example illustrates, if you can manage to maintain your expenses, a 10 percent increase in revenue will very positively impact your bottom line. A 10 percent increase in revenue yielded a 20 percent increase in profit. It is simple to see in the above example how increasing revenue while maintaining costs is a much more effective method than simply cutting costs.

You might ask, “Do I need a website designer to grow my revenue?” Unless you are a web designer you must.

We can help you grow your business with your website, so contact us now.