Wednesday, September 21, 2016

Aim for High Topline, So you can fight for Good Bottom Line



The ultimate motive to run our own business is to earn money. There is no second opinion about it. Our goal should always be to make money. But it is one of the secrets; at least in manufacturing that you cannot make money from Day 1. You have to build infrastructure, set systems, set your network and then you can set your own tone. You will have big overheads on you when you have machines, men, power, etc to pay. You need to cover those expenses. 



In the starting few years, you need to build customer base. When you have enough customers, you can distribute those expenses/overheads and then you can have enough time to breathe. Many startups close because of different reasons. But you need to stay alive so after some time when time is good, you can see jump in business/sale. So, my advice is to first build your sales/turnovers and then once you have good constant sales, loyal customers, you can look for more customers who are willing to pay high or you can look at your supply side, operations side where you can cut some costs, bring in efficiency. You can also try to increase the sales price to existing customers. Once they see your service, products, they will be willing to continue with you.

You need to aim for High Top line i.e. Turnover and then once stabilized, you can increase your bottom line by streamlining the processes.

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