What should be done to make a company profitable?

Answer 1

To make a business profitable, the following points can be considered:

**I. In the financial field**
1. Improve the level of capital operation. Firstly, increase income and reduce expenditure. Secondly, implement follow - up management of funds and strengthen fund scheduling and use. Thirdly, reduce the proportion of inventory and strengthen inventory management, so as to reduce capital occupation, optimize the capital structure, rationally allocate funds, accelerate capital turnover and reduce financing costs.
2. Financial personnel should do a good job in cost prediction, decision - making, planning before the event, cost control and accounting during the event, and cost assessment and analysis after the event. They should tap the potential of cost reduction and benefit acquisition from a management perspective.
3. Strictly control and save expense expenditures. Controllable expenses should be minimized, such as material costs and travel expenses. Enterprises should abide by the financial management system, adhere to running the factory frugally, oppose extravagance and waste, and try their best to reduce manufacturing costs, save production costs, strictly control period costs and compress non - production costs.

**II. In the strategy management field**
1. Technological innovation to seek new development.
2. Produce according to sales to avoid blind production of unmarketable products and resulting overstock.

**III. In the procurement field**
1. Use scientific decision - making analysis methods to reasonably determine the economic order quantity or economic batch, determine procurement items, select suppliers, and determine procurement time.
2. Further promote the centralized procurement system, establish a unified procurement platform for raw materials and other external services, and realize resource sharing such as price and suppliers.
3. Promote the direct supply system and gradually cancel intermediate suppliers; establish a procurement responsibility system and strengthen the sense of responsibility of procurement personnel and price reviewers.
4. Rectify the procurement prices of auxiliary materials and sporadic materials, and the procurement price should gradually decrease on the basis of the previous procurement sales price.
5. Explore the establishment of a procurement reward and punishment system, which is linked to leaders and individuals; strengthen the strength of technological research and development to reduce procurement costs.

**IV. In the production field**
1. Improve the utilization rate of equipment, and reasonably organize and arrange production to avoid uneven equipment busy - idle.
2. Optimize the work flow from raw material procurement to final product or service.
3. Reduce inventory. Reducing inventory requires reducing the number of inventories and the unit price of inventory. Therefore, the acquisition cost, storage cost and shortage cost should be correctly calculated to control the inventory quantity and inventory amount within the optimal range.
4. Control personnel costs, streamline personnel, and reasonably set posts and quotas.
5. Fully mobilize the enthusiasm of employees to ensure the effective implementation of cost control, comprehensively improve the quality of the enterprise, assign responsibilities to departments or individuals, improve the income distribution system, strengthen organizational incentives, strengthen individual incentives, implement rewards and punishments, and mobilize the enthusiasm of all employees.
6. Control quality costs.

**V. In the sales field**
1. Control sales costs. While expanding sales results and increasing market share, the sales department should strengthen the use efficiency of sales expenses and relatively reduce costs.
2. Reduce logistics costs. Reduce logistics costs through efficient distribution. Enterprises can realize efficient distribution, reduce the number of transports, improve the loading rate, reasonably arrange vehicle allocation plans, and select the best transportation means to reduce distribution costs.
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