How to Maximize your Business Profits following the Principals of 3 P’s to Profit Maximization
How to Grow your Business Big and Maximize the Overall Profits where Maximization is the Key
It is the short run and long run process in any business through which it aims to maximize the profits over the time. As an owner, you have to look after as to what kind of strategy must be formed that could help your business in maximizing long-term profits.
As already defined it to be a whole process which includes multitude of factors directly and indirectly affecting it to achieve the maximum output with the given inputs. This remains the sole aim of profit maximization i.e to get the marginal profit equal to the marginal cost.
This achieves the maximum profit target for any product when the marginal revenue is equal to the marginal cost. Revenue is the money that any company receives from the business it is carrying on like sale of goods or services. Fixed and variable costs included together as the total running cost of the business.
In this article we are listing down the 3 P’s that are crucial for any business whether small or large, to maximize its profits which are purpose, partners and proactive approach.
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| How to Achieve Maximum Profits with 3 P’s To Profit Maximisation: |
Tips to Achieve Maximum Profits for Any Business using 3P’s of Maximization:
Let us study these 3 P’s in detail in the light of profit maximization:
1. Purpose:
➤ Why did you start your business?
➤ What is your objective behind it?
➤ How can your business serve others?
➤ Will it have a positive impact on society? ..etc
Everything that forms a part of your business must be purposeful. Be it your business goals, product or service, process & decisions or whatsoever action. There should exist a purpose behind it all.
Having a clear purpose contributes to financial performance as well as branding. It is believed that companies that prioritize purpose grow faster than those that do not.
Though some people believe that money making is the major purpose of any business but to be honest here, with this purpose no business can thrive. This is the reason why businesses have mission, vision & values.
A purpose driven business model makes the employees see a clear picture as to why business exist and motivates them to work towards the accomplishment of goals maintaining consistency in their work which ultimately leads enhanced performance and higher profits.
2. Proactive Approach
In the business world many unexpected situations arise which you might not have even thought of. When you react in that uncertain situation then maximum chances are that of delivering less effective results. The reason behind it is that you don’t get time to think how to cope with that situation, what will be the consequences of your action.
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| Proactive Approach |
This is where it becomes important to have:
– a proactive approach that works for your business and handle the situation in the best possible manner to get the most effective solution.
Reacting instantly to some uncertain situation can affect something somewhere in a negative way if not done thoughtfully which may in turn affect the productivity and quality that ultimately will end up ruining profits. Therefore, it is necessary to stay proactive in the business and to have reason for every action taken.
Also, you must lay down all the possible outcomes positive & negative that can occur as a result of the action taken or decision made, so that you are ready to deal with any kind of situation.
Proactive companies are more adaptive and keep themselves updated with on going business trends. Proactive approach helps in utilizing resources the best, makes the business ready to face any challenge and keep it alive.
3. Partner
A very unfortunate thing that exists in the businesses is that it fails to realise that before anything else, the partners are humans. In the business world, partners are considered merely as organizations or units. Who is a partner basically? Let us define that first in generic terms.
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| Partner |
If you talk in context of any business then there are considered five main partners which are:
➤ Customers
➤ Suppliers
➤ Investors
➤ Community
➤ and above all, the employees.
To put in simple words, a partner is someone who shares something or associates with the business.
➤ Look out for this while choosing a right co-founder for your Business
➤ Good relationships with each of these segment of partners leads to greater profits for the business.
➤ Employees when happy & satisfied will put in their maximum efforts to deliver the best performance.
➤ Positive customer experiences will increase customer loyalty that will bring in higher revenues for the business.
➤ Similar goes for suppliers, good relationship & mutual understanding helps in obtaining products & services at less prices.
➤ Contributing to community be it local or global helps in increasing the awareness of your business/brand amongst people which also increase your chances of earning more revenue as a result of more customers.
➤ Lastly, talking about investors, then the ones who are focused towards long-term growth & profits must be engaged with as these will help in creating the environment of growth & innovation which will eventually take the business higher.
➤ Visit here for Startup Tips for Beginners in 2022