Business

7 main reasons for low profit

Many companies have low profits, are on the verge of bankruptcy, and are waiting for a miracle. This has even become the norm for some. This happens for years, sometimes even decades,but there is no miracle. Before the crisis, the economy still had extra money, which somehow saved the situation. But the crisis has come, the extra money is becoming less and less, and therefore the situation is becoming more and more difficult and to get out of it, first of all, you need to find the reasons for the low profit.

The situation itself will not be resolved, so it’s time to take active action. To start acting, first you need to find out the reason, or rather the reasons for the low profit. There are a lot of them, but there are the main ones that make the maximum contribution to reducing profits and, among other things, cause a number of other negative moments. It is with their elimination that it is advisable to start everything.

The first reason for low profit is subjective advertising, which is done without relying on the market and needs

So, we begin to determine the reasons for low profits. The first of them is subjective advertising, which is done without relying on the market and needs, but based on the considerations of the specialist who deals with it. He decides what the ad should be. Analysis of the market and needs, application of technologies are not expected. In fact, the specialist makes advertising for himself, specifically for himself, meaning as the recipient of the advertising message.

The second reason: everything that does not lead to activation of the idea is pseudo – advertising

As mentioned above, real advertising is the activation of ideas embedded in customers. If the ideas are not active, the person does not need anything, he is in a state of complete satisfaction and happiness. In order for a person to want something, it is necessary to activate the embedded ideas and this is done just with the help of advertising. Only when an idea is active in a person, he wants to implement it, and for this he needs a product or service that are ways to implement the idea.

The third reason is inappropriate advertising, which creates customers not for you, but for other companies, including competitors

With this approach, you spend your money on activating other people’s ideas, getting not into your target ideas, but into others’, resulting in a demand for the goods and services of other companies. These companies get free clients and thus increase their profits at your expense, while you either get low profits or do not get any at all.

The fourth reason is ad-free advertising

As mentioned above, advertising is the activation of an idea. One idea can only be activated by another idea. But very often attempts are made to activate the idea with thoughts. Everything is done correctly, according to technology, but instead of an idea, a thought is transmitted. It takes money and time to get it and put it into communication. Moreover, the money is planned to be returned by creating needs and, accordingly, sales.

The fifth reason is the lack of its own market

When there is a market, there are people who are pumped by a controlled idea. They are always ready, always waiting for you to activate the idea and offer the appropriate product for its implementation. In this case, minimal activation and monetary expenditures are sufficient to create a need. But if you don’t have your own market, then you have to create maximum activation of the idea of a common market in order to look more attractive than your competitors.

The sixth reason is the lack of correspondence between the product and the idea that it is able to implement

When there is a match, when a person sees that the product is exactly what he needs, which is able to implement the idea, he buys it very quickly and for the money that you ask. In this case, you get 100% of the possible profit. If there is no match, the buyer has many objections. Withdrawal of each objection is a decline in profits, the costs of time and other resources.

The seventh reason is the lack of a key to the product

Without it, products are developed and produced that by and large are not, they are soulless, unworldly objects, in fact, just a bunch of materials. Using such an object does not lead to the implementation of the idea, which causes frustration from the purchase. As a result, they are not in demand and lie in warehouses for years.