The Johns Hopkins Business and Consulting Club Increasing Sales and Reducing Costs

Increasing Sales Two Steps 1- Think about the relationship between sales and profits 2- Determine action

Increasing Sales Step 1: Think Increasing sales does not necessarily mean increasing profits Think about the relationship What can be done?

Increasing Sales Think (cont’d) What do you need to know? 1- How are we growing relative to industry? 2- What has our market share done lately? 3- Do we know what customers want? 4- Are our prices competitive? 5- Competitors marketing and development?

Increasing Sales Step 2: Take action Four Ways to increase sales: 1- Increase volume (more buyers, distribution, marketing) 2- Increase amount of each sale 3- Increase price 4- Create seasonal balance

Reducing Costs Two scenarios: 1- Decrease in profit margin 2- Surge in costs * Two different causes result in the same need

Reducing Costs 1- Decrease in profit margin Step 1- Ask for breakdown of costs Step 2- Investigate suspicious costs Step 3- Benchmark competitors Step 4- Investigate labor/cost saving technologies

Reducing Costs 2- Surge in Costs A- Investigate internal costs - Union wages - Suppliers - Materials - Economies of scale - Increased support systems

Reducing Costs Surge in costs (cont’d) B- Investigate external costs - Economy - Interest rates - Government regulations - Transportation/Shipping strikes