Factors that determine profitability of a business.

[btaliat]

It is not a doubt that most people if not all people set up their businesses mainly for profit making. That's why it is common nowadays seeing threads asking about profitability of a business.

What makes a business profitable may not be the nature of the business but how it is handled. That is to say, there is no business that's not profitable if well managed.

One of the factors that can determine the profitability of a business is good location. A business owner or intending ones need to make sure they find a good location for their business on order to attract more customers.

Then there should be good management. Whether it is a one man business or partnership, there should be good management that will handle the business effectively to yield profits.

 

[Augusta]

There are different things that should be put in place if a business needs be profitable. Starting from the location, to good pricing down to be managing must be well taken care of. A business needs proper maintenance to be able to drive it successfully. A business without adequate profit would fail

 

[Sherman198]

We have so many things that determines the profitability of a business. For a business to be profitable, the owner has to be selling the right products for the people and also, he/she should be in the right location. That's why it's reasonable to carry out a market survey before starting a business. A business that started without surveys can't really go far.

 

[Josemendez]

A business owner or intending ones need to make sure they find a good location for their business on order to attract more customers.

I agree with you on this . Good location goes a long way in making a business successful because businesses situated in urban area especially in area with good electricity and water supply are easily noticed compared to those in the rural area where there is bad road and unavailability of social Amenities.

 

[Mataracy]

Another factors is the price that one place on each product. The price also matter because there are some consumer whenever they see that your price is to high they will look for another alternative that one can easily laid hand on. And if people do not patronized the business there will be reduction in the profit that will be made vise versa.

 

[Mika]

The first and foremost requirement for earning profits is selling products that are unique, interesting, and useful. If your products are unique to the market (no one sells the same product, or there are very few sellers for the product), you can expect the sales to skyrocket. If your products are useful, a lot of people will be buying.

 

[Alexandoy]

I agree with the good location. Several businesses inside our village have closed due to the location that is not really accessible to the potential customers. For those businesses outside our village and located in the main road, they are getting most of the customers in our area. That is clearly an advantage in the location.

 

[Wisdom01]

Location is truly one of the factor to consider , because many business that fails to launch their business in the best location , might not be able to achieve their aim goals because the location which they launch the business might not suit it resulting to less demand or no sales , business needs to consider this before launching their business

 

[Setho]

A lot of many small factors contributes to form how revealing profitable a business will be. Location is actually one very important thing to think about because if your business is closed where your customers are they will find it easier to buy.
Another important thing is the cost of production because the lower the cost of production the higher you save in profits.

 

[sincerem]

Every one's dream is to make steady income via his or her business. No one wants to start up a business simply for it to crumble in the later stages or generate lesser income that isn't worth it or well adrift of the expected income. That's why we need to plan well when it comes to business before we start one.

 

[Kendy]

There are several factors which can determine the profitability of business and these ranges from; location, good management, feasible business plan, creativity and innovation amongst others. The location is very vital in promoting the profitability of a business, the location should always be given topmost priority because this is where you can access your target audience. For instance, operating a computer shop in residential areas would not be profitable as when the same business would be operated in a busy environment like; school campuses, Universities and office areas. Location can either impede or skyrocket the business.

Good management is also necessary in business, this is because even though the location is feasible yet the management and the techniques adopted is poor or faulty, then such business would face decline. Good management should be given prominence in business to avoid excessive and unnecessary spending of money. The funds should be managed even though it is in abundance to help out in unforseen circumstances. A good manager can make his little funds to become substantial funds but an incompetent manager would always look for excuses to spend funds haphazardly and blame the shortage on the economic situation of his Country. Creativity and innovative ideas like rebranding could always spark up sales and boost the business growth.

 

[Kingsley]

There are indeed factors that determines whether a business will be profitable or notmamd there are are wide range of them, i will start off with the ones that we may likely want to overlook, somany people think running a business is Al about just buying what we need and adding some amount of money and then reselling them at at a different price that makes one profitable, business actually goes beyond just that we need to be more creative and be different in the way we handle our business and customers. we need to know how to add value to the goods or service we are trying to sell to our customers.

The first one I will be looking at is the customer relations, how we relate with our customers will go a long way to either keep them or send them away to our competitors, we should try and understand that we are not the only one selling that particular product or services, and when we behave rudelyto the customers they will go all out to other places to access the product and services. Been customer friendly can make a customer to travel from far location to come and patronize us.

 

[Chibson]

Nobody without having the mindset of making profit, that is actually the main reason that some people venture into businesses. But there are a lot of things that determines whether in business will be lucrative or not. One of the things that determines if a business will be lucrative as you have stated is a good location. it is very much important that before you set up a business you look for a location that you will be very favorable to your business if not you will not be able to make any profit. Some of the things you should look out for whenever you are looking for a location is how competitive that business is in the location you are trying to situate. if there is high competition in that particular location that means the business is lucrative there but you should also note that competition sometimes is not good for small businesses or new businesses. It is important you look for an environment that is not too competitive for your business to thrive and locate your business there. Another thing that determines whether a business will be successful or not is the kind of people you employ, if you employ people with good business mindset your business will definitely succeed on the long run.

 

[funmi]

What could possibly determine the profitability of a business besides it selling or sales potentials, ones profit is calculated as total sales less total expenses the rest should be ones profit or loss, depending on the one that is higher between the expense and the sales. Anyway for one to be able to always have a winning situation in his or her business , then there must be some winning strategy that must be put in place mostly if you are residing in a country where there is economic instability like my country. Because the economic stability of a place will really count in determining if a business would be successful or not because you can't do better than the country you find yourself as the economy you find yourself will determine how far you will go. If someone like Dangote were to come very a more better economy he might have been the richest man in the world. Then to determine the profitability of a business we must check the earning potentials and look up some other indices that will help us analysis the profitability capacity. Although other factors such as capital, location and level of technical know how willl all be a part.

 

[Stena]

In the business world today, it seems many are all out to make daily gains. Some people just establish a business and then put in a sales person who is expected to make account at the end of each day. No new strategies, no development or expansion, no value added to goods or services, and this cycle continues until the day the business is folded up.

We need to understand as business persons that there is more to just running a business, especially if you are keen on the profitability and growth of your business. The following points should be taken into cognizance:

1) Ensure you get a well drafted business plan. This plan is what you fall back to when it seems you are not getting things right in the business. Most persons after writing a business plan just dump it on starting the business, which is not supposed to be so.

2) The location of your business is of Paramount importance. Get your business out to an area where you can easily attract your target market. If your business is offline, endeavor to give it an online presence too, that way, you can get a huge customer base and increase sales.

3) Business management is one area that business owners do pay adequate attention to. Pay attention to the way you utilize your resources, minimize overspending, advertise your business from time to time, boost customer rapport, encourage reviews.