Finance Finance Question: How To Deal With Inconsistent Profit Gains?

[Good-Guy]

The real aim and mission of any entrepreneur is to gain financial independence and gain as much as financial benefits as possible. This is exactly the main reason why many entrepreneurs try to maximize their profits as much as possible and they do this by expanding financial activities in order to make their business much larger and expand it as much as possible. However, there are many businessmen who do make profits on monthly basis and even daily basis. However, the percentage of profits earned per month is non consistent. Sometimes they earn a lot and sometimes they don't. This leads to financial problems. I believe that the best way to deal with this problem is to set a minimum target and try to achieve that target somehow and then manage funds to expand business. How would you deal with inconsistent profit gains and financial problems caused by such inconsistent gains?

 

[btaliat]

Everyday can not be pay day. A business owner should not be expecting everyday to be his wining day. The only thing to be worried a business owner is if the loss keeps persisting. Then he can try to identify what's he doing wrong and try to figure out what he can do to remedify the situation.

 

[Good-Guy]

Everyday can not be pay day. A business owner should not be expecting everyday to be his wining day. The only thing to be worried a business owner is if the loss keeps persisting. Then he can try to identify what's he doing wrong and try to figure out what he can do to remedify the situation.

Inconsistent profits are inevitable. However, when it comes to business, I think the best way to deal with very inconsistent profits is to trace down the problem that is causing inconsistency in the profits. Maybe your employees are not performing well. Maybe your marketing manager is not performing well. There are many possibilities. The best thing here would be to analyse your business properly.

 

[btaliat]

Inconsistent profits are inevitable. However, when it comes to business, I think the best way to deal with very inconsistent profits is to trace down the problem that is causing inconsistency in the profits. Maybe your employees are not performing well. Maybe your marketing manager is not performing well. There are many possibilities. The best thing here would be to analyse your business properly.

That's the summary of what I put up there. Aside this, a business owner should be saving his profit for the time there won't be much profit. It is even possible to be cutting some cost during the time that he is not making much profit in order to minimize the loss because making loss is inevitable in business.

 

[Alexandoy]

When the profitability is not consistent the first thing to look at is the product of service. There are products that are seasonal. In restaurants their sales go down during weekdays because their customers have no time to dine out. Some services are also seasonal that you have to grab the opportunity when the season starts like Christmas or summer.

 

[Holicent]

As a small business owner, you should be aware of the fact that sales and profit are not always consistent. In fact, they can fluctuate wildly depending on what's going on in your business.

Sales are often unpredictable. This can be due to seasonal trends, changes in consumer spending patterns, weather conditions or other factors that impact your customers' purchasing habits.

Inconsistent profit margins can occur for several reasons:

Your sales may be less than expected (low demand). You may have overspent on marketing and promotion costs that didn't result in increased sales. Or maybe you spent too much time and effort perfecting your product or service, but didn't sell enough of it to make up for all that time spent creating it.

Your expenses may have increased faster than anticipated (high demand). The cost of doing business is never constant; it depends on many factors including employee growth and hiring new employees, operational costs such as rent and utilities, equipment purchases, supplies etc..

 

[Augusta]

When it comes to business I don't think anyone should expect a standard level of profit all the time. This is not a salary that it is fixed that you expect the same amount of money monthly it doesn't work that way. Even for some salary earners especially for private workers they are times the salary might be increased or reduced according to the financial situation of the business so you don't expect anything to be static.

Having stated this, I will relate this to the above topic, I don't think profit fluctuation in a business isn't anything new it will continue to be same because level or volume of sales daily can't be same. You don't expect to have the same amount of customers daily so profit can't be same. Some days it will go up and other days it will be down. But the profit margin should still remains very high

 

[Sotherefore]

Setting a target price of profit to be made at the end of the month by business organisation may not really depend on the business. This sometimes is beyond their control but will depend on the demand for their services or goods every month that will determine the profit they will generate.

Instead of them to set a target monthly achievement this way I rather suggest that they try as much as possible to advertise their business and get a lot of people to patronize them because the more people they will get then the higher their profits will be. .

If that could not be achieved then making your business to be more renown by offering quality products can also be a way of increasing revenue .
Setting a target price on monthly basis may actually be for business that do not need consistent patronisation by people or client . .

 

[Yusra3]

Seesaw profits can be very frustrating. Relieve the mountains by creating a savings account that will have surplus revenues for emergencies to sustain operations during slower periods. Study losses in order to get to know the reasons for them- seasonal fluctuations, high expenses, shed clients and adjust your business model as well as projections to fit the realities. Diversify your offerings, introduce process improvement to reduce costs, and pursue new channels of revenue. It’s important to have strong contingency and adjustments capacity to weather out the shocks of short-term profit changes.