From Survival To Revival

“A business doesn’t run on sales volume or sales $$, it runs on gross margin” In o rder  to survive, your business has to have sufficient gross profit. Simply, gross margin is the money the business retains  after incurring the direct costs associated with producing the goods and services sold   ( Cost of G oods S old ) . The bigger the left over, the more money your business will have to cover other fixed and operating costs  and most importantly to make a profit .  As you have realized, it is a pretty simple concept but business es  often ignore the importance of having healthy profit margin. Cost of G oods S old is the accumulation of all the variable and fixed costs directly related to your sales and excludes costs such as marketing expenses, rent, office expenses,…   Now , you might ask yourself: “Why should I care? Isn’t it all about sales revenue or profit?!” So , let’s explore the importance of knowing what your gross margin is....

As brutal as it might sound : l et’s dissect the market it is crucial to have a deep understanding of the market you are operating in. In previous posts, I have briefly mentioned the importance of selecting your target market. So, if your product is ticking all the boxes , you truly believe in your processes BUT the business is still hardly viable, then there must be something wrong with the market you have chosen to operate in. Target market is defined as the market you intend to sell your products and services to which includes a targeted set of customers. As Alan Lafley  the author of Playing to Win  says you need to know “ Where will you play and how will you win” .  In order to reach out to your appropriate target market, you need to be able to divide the market into different segments. So, each segment will dictate who will be your potential customer. You can have different approaches to market segmentation, just make sure you are asking yourself : -...