Many people think that the destruction of companies has external causes; Like times of crisis and recession. But research shows that 90% of business failures are internal… One of the most important reasons is how to calculate the company’s profit.
Business is sometimes good and sometimes bad, sometimes it is very profitable and sometimes it is low profit. Sometimes it destroys or makes you rich. Why do some companies grow in times of recession and crisis?
These same companies make a lot of money and also attract the satisfaction of the society, important question is: Is profit the ultimate goal of a company? No … the ultimate goal is to serve the community. Your profit is a reward you get through the community. If the value of the product is high for the community, your profit will go up and vice versa.
These days, it is the people who determine how much everything is worth. If you have the necessary standards for products and services, you should have a reasonable profit in your industry. This is a principle for your survival.
To do this, you need to pay attention to a few points:
- Set prices in a way that sustains you during a recession
- Also, pay attention to taxes when it comes to pricing.
- Prices should be based on the product life cycle to be ready to compete with the market
- Consider product management costs
- Do not forget to pay dividends to shareholders
Remember that the value and profit of a product are not determined by the company manager Rather, it is a society that determines it.