Once you pass breakeven the amount of sales is less significant than your profit return on those sales. If your Net Sales increase 20% and your Gross Margin decreases 12%, all you are doing is working harder for less money.
The key is consistently identifying what you can do to increase the prices you charge while lowering your costs to deliver your products and services.
Overview
The first part of consistently making more money year-over-year is to earn the right to increase your price by clearly providing greater benefits to your customers, leading them to keep returning to your business to acquire what you sell. You do this when you provide more of what your customers need and want today because you know what problem your products and services solve.
The second part of consistently making more money year-over-year is to do this at a lower cost per unit this year than you spent last year. Managing your direct and fixed costs down as a percent of sales is how you generate superior profits.
The formula for making more money is as easy as this.
