Your services business lives and dies by its profit margins. Business professionals say all the time, “We have more sales than ever. My company is growing. But I’m not making money. I don’t get it.”
The answer lies in profit margins. Growing your margin, not revenue, is what indicates your success. You can grow revenue, sure, but if expenses grow just as fast, your profit won't reflect gains. There are two ways to boost your profit margins: lower your costs (while your revenue stays the same or increases) and increase your revenue (while your costs stay the same or decrease). Leading companies are innovating today, to help increase their revenue while reducing costs. Here are six companies who are doing it right, right now.
Six companies boosting profit margins in 2015:
- UPS Cuts Drive Time with Tech - The distribution service is cutting nearly 90 percent of drivers’ delivery route thanks to greater technology. E-commerce efforts are also expected to double UPS's sales in the next five years.
- Samsung’s New Models Reduce Materials Cost - In its latest two phone models, Samsung has upgraded its camera hardware and software. The company has also updated its wireless charging support. The changes bring down the bill of materials, lowering Samsung’s costs. Read more about these Samsung changes at Forbes.
- General Mills Restructures to Cut Costs - General Mills led a series of restructuring initiatives. The move lowered costs, improving its year-over-year quarter results. Lower advertising and marketing costs also impacted the bottom line. More restructuring is expected to occur in the coming years.
- Ford Launches New F-150 Hurt Pickup - Ford sales have boosted over the past quarter, thanks to sales picking up of the new F-150 Hurt pickup truck. Operational efficiencies have also contributed to gains.
- ARM Cement Raises Production Capacity with New Plant - ARM Cement is East Africa’s second largest cement producer. After slinking sales, ARM opened an additional plant, which will boost the company’s production capacity by 1.2 million tons.
- HP Closes Deals with Salesforce - HP is speeding up how fast it cinches deals with Salesforce. The SaaS technology guides HP’s pricing with data-driven guidance.
Grow your margins in one hour. Join Mavenlink for a complimentary webinar October 22, 2015, at 10 a.m. PDT. Business coach and consultant veteran Curt Worsey will reveal how Business Intelligence (BI) can help you make stronger decisions driven by data. Worsey brings more than 30 years’ experience as a Senior Partner at Accenture to this event. Spots are limited. Register today.
Congratulations on becoming a profitability expert! Next, learn the differnce between profit and margin.