How to improve business efficiency?

Suppose you are developing programs for the order or something like that and want to get more from your business, where to find reserves? About this further, but for a start, a small digression on the theme “we are sitting, and the money is going”.
Recently I read Kiyosaki, who is a well-known blogger Max Krainov, who calls him a charlatan . I don’t intend to argue about a charlatan or not a charlatan; a person earns his own money from books as well. I would say that these are books from the “you will succeed” series, of which there are quite a few, all are read with varying degrees of interest, since they are written easily and easily. The feeling is that the author is sitting next to you, you look at him with a certain amount of respect and listen as he climbed the financial ladder and got out of the "rat race" earning a hundred, a thousand, or a million dollars without much trouble at work.

After reading the book “rich dad, poor dad,” he found some clever thoughts , business consultants do not eat their bread for good reason, but on the whole the whole book can be reduced to a few tips, “dare and you will succeed”, “invest money in assets, better in real estate "and" if you do not have money to invest, borrow someone. " For ordinary business, these tips do not have much to do, because they are written for a simple man in the street who wants to get rich once. It seems to me that real estate investments are good, but investments in a business can bring much more, although in this case there is more risk for the investor.

In general, the books in the series “you will succeed” are similar to each other. Usually, these are stories about how someone, having nothing behind his soul, turned out to be at the right time and in the right place, and now his wealth has no limits, as they say “from rags to riches”. You can read once for the general development and raising your own motivation. But if you really want to increase the financial return from the business, then you need to read serious books on financial and management accounting. It was a brief digression, and now about what I wanted to write about.

And so, as financial gurus advise to improve business efficiency?
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Most companies are formed for profit. Of course, we don’t take a business that is actually not a business, but a hobby. There is a cash flow from the sale of some product or service. There is a cost price of this product, i.e. those costs that must be incurred in order to produce, pack, and deliver the goods to the consumer, there is still a surcharge on the cost price, which is included in the final price for the consumer. According to this formula it is easy to calculate the final price of the product or service.

For example, if someone makes a program for the order. How much to take from the client for the program? Consider: Suppose the creation of a program takes a net two weeks. Let's take a simple example, when it will be done by one programmer with a salary of 50 thousand rubles. (this figure is slightly larger than the one used to calculate the cost of the invention of the bicycle ) and does not take into account anything else, neither the training nor the documentation, nor the support. The programmer works in the office and takes for example 5 square meters. For ease of calculation, we take a rent of 1000 rubles per month per square meter. For Moscow, this is not a big bet. We get the cost of developing a two-week program or half a month (10 days, 8 hours each, since we are not working on weekends) is 50000 x 0.5 + 5000 x 0.5 + 7500 (tax on salary about 30% of salary) = 35,000 or 438 rubles per hour. Now, if the program price has already been voiced by 35,000 and fixed in the contract (verbally or in writing), and the client will issue tasks to change the program in such a way that its creation time exceeds the estimated two weeks, then the business will not be profitable, since the programmer will have nothing to pay the salary and work will be carried out below cost.

Naturally, only a single programmer will work at cost prices, and in a real company there are other overhead costs, such as the salary of an accountant or other staff, and there should be a profit, so for the client, we add a mark-up to the cost of an hourly rate and we get 700 rubles per hour (or 1200 or even higher, depending on overhead costs and the desire of the seller), with seven hundred rubles per hour, the cost of the works described is already flying out to 56 thousand rubles. Then, after the project is completed, the profit minus taxes, for example, 6% of the single will be 56000-3360 (taxes) - 35000 (cost price) = 17640 or about 50%, which would be a very good profit if the programmer actually finished the project in two weeks, as it was planned and the client will really pay all the money agreed :)

If you want to run a profitable business, and not just do a good deed to your client, then the formula
price = cost + margin should be the main formula of your business.

So how can you increase the financial return from the business? The most effective recipe: less spending and more revenue. If the costs are small and the revenues are high, the enterprise thrives. As the famous proverb says: “It’s not the one who receives more who is rich, but the one who spends less.” If we turn to the classics, then there are several ways that will help increase the profitability of the enterprise:

1. Reducing costs per unit of production. Reducing the cost of production occurs if you reduce the cost of labor. Use less qualified staff with a lower rate. To reduce non-production expenses, for example, to send programmers to work in basements or even home and not pay rent. Outsourcing significantly reduces the cost of production, but requires more attention to quality control. You can improve the efficiency of processes when in less time you create more value for the business, for example, the programmer makes one program that can be sold to several customers.

2. Increasing the price of products is the second way to increase the financial return of the company . Costs remain at the same level, the price increases, income, according to logic, should increase. However, not all so simple. Here the laws of the market come into force. In the end, when a certain price level is reached, their further increase with the same consumer qualities of the product leads to a reduction in sales. Some buyers refuse to buy and go to competitors. In the end, there comes a time when the price increase no longer covers the declining sales volume, and incomes, instead of increasing, begin to fall. Here, the task of marketers is to find the maximum price when the goods are still being sold, although in smaller quantities, but the profit from the sale at an inflated price covers a decrease in sales volume.
3. Increase sales with an impact on the buyer. The buying process is a psychological process, regardless of whether a pan, rolling mill or software development services are bought. Sales psychology is described in many books. You just have to walk to the nearest bookstore (or just search the Internet), and you will find a lot of publications with such names as “Sales genius”, “How to become an ideal seller”, “How to sell anything and to anyone” and so on and so forth like that Most of the ways of increasing sales described in these books use buyer manipulation techniques. For B2C sales - it works, for B2F sales (business to fool) - it works doubly, but other laws come into force for B2B sales. If the sale is made not at one time, then the manipulation techniques are not suitable here. It is not always possible to simply increase sales by using one of the psychological techniques, but if you really increased it (with the help of advertising, hiring a “seller-killer” who can sell to anyone and anything or other secret means), then you may encounter a problem enterprise overloads, especially if your goods are characterized by seasonal demand, and underloading is not in season. How to get out of this situation is another story.