All businesses should have one goal: Make Money
Anyone who tells you anything else is either lying or has so much money that it is not a business but rather, a hobby.
Generally, in order to maximize profits, a business needs to track it's ROI (return on investment) of every expense and cost within the business.
For example: Joe's Barber Shop.
Fixed costs: Rent, Utilities, equipment;
Variable Costs: Employee salaries, advertising, hair supplies.
In order for Joe to increase his profits, he first needs to determine what kind of ROI he is making on the various expenses he pays and how it effects his customers. Although Rent is a fixed cost, Joe may be able to move to a different location and decrease his rent while maintaining the same or more customers. Joe can reduce employee salaries and give them a percentage of each customer's payment. This will have the effect of only paying the employees more when they bring in more revenue to the business. Is Joe's advertising effective? If he doesn't have a tracking mechanism in place, there is no way to know whether it is highly successful or a complete waste of money. All expenses should be tracked and measured against their effect on profit.
One of the most important aspects of increasing profits is also the simplest.
Raise your prices.This sounds simple but most business owners are afraid to raise prices because they will lose customers. Although you may lose some customers due to a price increase, each customer who is still with you, will be more profitable.
So the net effect of price increase will be
Less Work, Less Customers and More Profit. But, if you don't raise prices, you can increase your customers, increase your work and make less profit, per customer.
You choice.
