How to Find Hidden Profits in Your Business

In this article today I would like to talk about several different tips, tricks, and tactics that just about every business owner can use to help find hidden profits within their business.

With the recession that started towards the end of 2008 and has continued well into 2010 rearing its ugly head, it’s more important now more than ever for business owners to find as much hidden profit within their business as possible. Every penny that you can squeeze out of your company these days is a direct benefit because it can mean the difference between keeping your doors open or laying off your employees and closing shop for good.

Luckily, most businesses have many pools of hidden profit that tend to get overlooked when times are good because there are only so many hours in a day. When times turn bad however, like the recession we’re in right now, it pays to start turning over stones and looking for these hidden assets right in front of your nose.

One immediate source of hidden profits has to do with your employees. When times turn bad most companies look at employees the wrong way. They see them as an expense line on a report that Employee theft can easily be erased by firing or laying off workers. This may be an immediate fix but it’s not a long-term fix because in the long-term every company needs skilled employees to grow and expand the business.

Instead, start looking at your employees differently. Most workers in most companies do a bunch of unnecessary things throughout the day. It’s human nature to create busywork and this sort of busywork can become entrenched in a corporation so much so that its employees stop being as productive as they could be. Zeroing in on busywork and cutting it out can add massive amounts of productivity which translates almost immediately into increased income for the company.

The next place to find hidden profits for your company lie in pricing opportunities. One thing any company can do is find the one product that they sell that the public can’t do without and absolutely loves. Then simply raise the price. In economic terms, if the product price is inelastic, you’ll make more money and increased revenues then you will lose in customers getting mad at the increased price and choosing not to purchase. This can be tricky needle to thread but if done correctly can dramatically increase the bottom line in any business.

Finally a company can find hidden profits by removing products or services that are no longer as profitable as they once were and focusing their resources and capital and energy on selling the products that are more profitable. This may seem counter intuitive but in times of recession it’s sometimes necessary to shrink the company and become leaner and more laser focused. This path can lead to greater profits in the long run, at which point you can resume expansion.

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