How Businesses Really Earn Profit

 

As we know that the main motive of a business is to earn profit. But Have you ever thought of how does a business drives profit?

Well, a business can earn profit by approaching various methods and techniques. But mostly business drives revenue by using traditional methods like "Buying goods in less price and selling in high price" Yes, businesses adopt this method by buying their goods in low prices from the wholesalers and then selling these goods to their customers in such a way that business covers the cost of goods and also drives the profit/revenue from selling price.

→ Let's just say a student, who bought 5 books 10$ each. And sells these books in 15$ each. Now the total cost of his buying was 50$ but his total selling price is 75$. In this way, he doesn't only cover his cost price but also derived revenue and thus earned profit.

Another approach which is considered in this regard is "Reducing Business Expenses." A businessman tends to reduce the expenses of business by not going for unnecessary advertisement of his goods or by keeping less staff. By avoiding unnecessary ads, doesn't mean that a businessman adopts the approach of zero marketing. Instead, they embrace the low and cheap cost of advertisement like giving Free PR packages to influencers for their products promotion or through their social media posts. And keeping less staff doesn't mean that every business can earn profit through this technique. No, this approach works best for small business scales like Bakers, Carpenters etc.

Another best approach is to "Attract Customers." Though this may not be easy but once a business attracts its customers, then no one can stop it from earning high profit. Take the Example of Online shopping websites like TEMU, DARAZ etc. Attracting the customers, definitely increase sales and ultimately increase revenue and profit. While attracting customers, think about this "What characteristics sets our product apart from our competitors? Why should the customers buy from us?" This helps better utilizing customers preference and ultimately attracts them.

Last but not the least, providing best products or services to customers. "Providing Better Services" than its competitors, a business can built a strong and trustful relationship with its customers and where a customer would buy for itself, he/she also suggests others to buy and ultimately the business will grow, and profit will expand.

These are some common approaches adopted by a businessman to increase his profit. Take a look around your small- or large-scale business and observe their profit increasing strategy. Or they using the same method? Or their method differs from this?