In business, it is not always getting profits every month. There is a phase where your business decreasing. As a consequence, a business generally has a cycle from introduction, growing, peak, and declining phases so that it is reasonable if it has up and down conditions to get profits and income.
There are some various causes making it happen. But, one of the factors is weak economic conditions in some other countries. In this crisis phase, despite of the increasing raw materials, purchasing power of consumers also decreases. Taking a quote of Diamond Bank and ZAP Finance, those share some tips that can be applied for improving business profits in a crisis period of time.
Firstly, make an analysis of profits and loss ahead your business for two last years. Make a comparison of cost composition and profits with a way of year – on – year. “ For example, the business profits on September 2016, is compared by profits on September 2017 so that you are able to understand a particular post being the potential and not potential one, said the chief executive of Diamond Bank.
Secondly, if the income post decreases, start to find the factors causing it. Does your business have many same competitors so that it influences purchasing power?.
“If it has many competitors, you can add product variants or focus more on the superior products having high margin. If the purchasing power of consumers get decreasing, you can reduce the portion in order to make the price low, “ said her.
Thirdly, it must be flexible. The general difficulty is the longer adaptation time to situation and new condition. For example, my friend having an organic bakery has difficulties to find raw materials with old prices because most of the ingredients are imported.
After she survives for months, finally the owner of organic bakery is able to find substitute ingredients and finally introduce newly economic cake variants. The adaptation ability should be had by business actors in order that the profits are not reduced by the increase of costs.
A conclusion of these strategies is that business is a part of your family investment. If a business has decreased, the risks are unseparated part. Thus, don’t invest all of your fund in your business in order that family finance stays stable though an economic condition is not prospective and bad. Those are some ways on how to overcome low purchasing power in business.