Step by step guide for becoming more profitable in Business

The only reason why most businesses are formed is to generate profits.

Expenses Revenue graph

In the quest of making profits, founders spend so much time, energy and money, especially on the top line of business and generate a good gross profit but fail to increase the net profit.

Your Business Profit = Revenue – Expenses ( I know it’s not rocket science, but wait for it. )

To increase Profit in Business, you need to either increase revenue or decrease expenses.

Now, what happens in most cases? You try increasing the revenue by increasing the expenses ( knowingly or unknowingly like more manpower, more resources, more capital ).

The key to increasing net profit, however, is to increase revenue without ( or least ) increasing the expense.

Here is a step by step process of increasing Net Profit in Business

1. Look for leverage, a stage where you gain most by spending less

“Give me a lever long enough and a fulcrum on which to place it, and I shall move the world.”


This science is equally applicable to businesses for making a profit.

As a businessman, your job is to continuously look for the leverage where you can spend as much less as you can and gain the maximum out of it.

This is what Tony Robbins have to say about the leverage:

“‘The leverage’ is the key to multiplying the business profit as compared to average growth of 10% or 20% per year.”

By definition, you see the term leverage associated with finance, but you can use the same definition but apply it to following

  1. Human resource
  2. Business modal
  3. Marketing plan
  4. Product or service

Some of the examples would be building a solution once and selling it to multiple people, reaching out to agencies or bulk buyers instead of end customers, and selling them, creating an automation system inside your company and freeing yourself for most of the day to day work and build another business

You can notice that for most of the above examples, you have to apply the same amount of time or money, but results are multi-fold & ongoing.

Like in our business, we reach out to agencies. The revenue from these agencies are much higher than revenues that we receive from end-users or customers in the same effort (sending mail, onboarding and billing, etc. ), so it’s a leverage state for us.

End User ROI


Agency ROI

2. Identify expenses, especially recurring expenses which are pre-approved on your card or bank

A penny saved is a penny earned.

I saved $ 1100 this year just by going through the statement of cards and respective bills. And this is an annual saving. That means every year I am going to save the same amount.

As a founder, we always aim to improve the top line and ignore the bottom line in the intense process of growth.

Remember, it’s the difference between top line & bottom line which is profit and hence both require your equal attention.

The easiest way of doing that is by going through monthly, weekly, yearly payment mandates.

By going through my phone bill, for example, I found out that my operator is charging around $13 for an internet pack that I cannot use completely, as per my last 12-month history.

Reducing the plan to my current usage saved me $13 per month. We have several members working with us who use the company-provided phone, which multiplies the saving.

Check the following and if it applies to you to cut the cost:

  1. Phone bills
  2. Electricity bills
  3. Software subscriptions
  4. Mailer subscription
  5. Unused domain or spaces
  6. Unutilised email sending programs
  7. AMCs

The list goes on and on—all it takes is a little time, and you will end up with huge savings & increased Profit in your balance sheet.

3. Instead of hiring full-time resources, look for remote workers, freelancers and automation.

Another important factor that can work like magic for higher profit, if used properly, is using automation, digitalisation along with remote workers.

For a few labour-intensive businesses, it may not make immediate sense, but for most businesses, especially the service businesses, it is possible to work with remote resources.

Removing humans from business is not possible, but there are ways around it.

A. Automation: One of the first things you can do in your business is automate as much as you can. It requires investment upfront and technical know-how, but its results are very impressive.

In our own business, we keep on looking at the things which can be automated and work in sync with manpower.

With the automation only, we were able to save the salary of two full-time resources and the interesting part; automation works 24 x 7 which no human can do.


B. Remote workers: Of course, humans can’t be eliminated in business; thus, you need them in business but, who says those have to be full-time resources?

After COVID, multiple companies gave workers the option to work from home permanently, and then, some people want to work from home even if they receive 20, 30 or 40 per cent less.

Hire part-timers, freelancers and remote workers, and you can save as much as 25 to 35 per cent in your business. This will be directly reflected in your Net Profit through the bottom line

Again working on the bottom line will improve your profitability in business.

4. For production companies, identify contract manufacturing, smaller contractors and maintain quality.

Many well-known brands have stopped manufacturing in-house.

These companies outsource the production and concentrate on maintaining the quality of products and brand building.

Contract manufacturing is very common in the pharma industry and some other manufacturing industries.

Look for ways to cut down manufacturing in-house and look for possible outsourcing.

You are responsible for delivering quality products, and if you control the quality well, you are doing justice to your clients with high profits in business.

There, you have the step by step guide for becoming more profitable. Feel free to reach out to us with your questions or comments; we would be happy to answer.

Author : Harish K Saini

Publishing Date : 10 December, 2021