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What Is The Best Way To Increase Profits?

What Is The Best Way To Increase Profits?
So the BOOM is over and your profit are decreasing rapidly. What to Do? Where To Turn? Who Can give real answers that really works?. If you want to increase business profit, it is very important for you to understand cash foundations. This is the key and proverbial “secret” to profitability. Cash foundation is the way in which money flow from the base of your business to global expansion.


The reason that business people are presently having fiscal trouble is mainly due to the way they were taught to handle money. The general approach is Start a business, increase production , more sales. This is the natural approach and from the surface does not seem wrong, but hides many dangers.


There Are Too Many Variables.
A business that is based on a sales model is doomed to failed. It only takes a variation in the buying habits of the market and your entire profitability diminishes or evaporates. Sales is only one aspect of foundational cash flow and should not be the only source of revenue. This creates “top Heavy” cash flow, this is where money floats on top of the business can be easily toppled.
This becomes increasing dangerous as the business expand. The more money that is acquired from the sales model, the faster it can be affected by market fluctuate or demographic. It would seen that more monetary flow is better than less, however a business with no foundation cash flow is actually imploding upon itself. It is creating money but the money is dependent on products and sales only.


What is Foundational Cash Flow?
This is process whereby a business using profits to slowly start new and unique cash flow streams under itself. This does not relate to my most hated word “diversification”.
Maybe I should stop and explain why I hate the word diversification so much. The conventional theory teach business people to move large sum of capital resource to acquire portfolio income (share, bond, treasury bill etc). The average rate of return is normally 3-5% (if so much) . In order to generate profitability, an immense amount of capital investment is needed to accomplish this task. It just seem to silly to work so hard for the money and then park money for minimal ROI or return on investment.


Let’s get back to cash foundation. This is the process of create new and unique cash flow that does not relate to your primary business. This is not moving large sums of money to start immense projects. It is can be company to matches , where a small sum of money is use to starts or strikes a new, unique and small cash flow / business.


It should be treated as a separate entity and grow like any other business. The key is to allow the new unique entity to funnel part of its profits to your primary business. The right approach is to start very small , in this way there is not a large divestment of capital resources.


As things progresses , the same duplicate via profit only should be done. The primary business will then have 5-10 unique cash streams under itself. If the sales model varies, it does not affect the increasing profitability. In fact, progressive growth is NOT how the business will expand. Remember you now have multiple businesses / cash flow. If twenty businesses are pumping cash flow , the next cash flow stream will be created faster and faster.


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