How to increase profitability: essential strategies

In EFI’s European Select of October, Rosemarie Monaco wrote a piece on profitability applied to the printer business. In her introduction, she states: “If you read the research, anywhere from the London School of Business to the Harvard Business Review, you will find the same advice. To be profitable you must examine, tighten and monitor two main factors: costs and productivity.”

I wouldn’t dream of arguing with the research, but I do believe the article is cutting corners and the advice given by researchers is taken out of context. Actually, to increase profits, you have two options: increase revenue or cut operating expenses. By improving productivity you’re actually cutting costs — the cost of putting up with lower than optimum productivity — so in essence if you’re working on these two factors alone, you’re going to do nothing else but cut costs.

You could also take a more positive approach and not only decrease costs. Why not optimise on the revenue side of the equation? Not that long ago I interviewed a signage printer who grew his business in the double figure percentages by focusing on niche markets instead of trying to do the same as his competitors for a lower price. Both approaches are possible with EFI’s VUTEk inkjet — which is what this printer was running.

For example, Bloomberg Business has advice that is more broadly applied to all possibilities a business has to increase profits. Its five bold solutions to help increase your profit margin dates back to 2008, but is every bit as useful today.

In an article called “How to Increase Sales & Revenue: 5 Essential Strategies”, Sam Ashe-Edmunds from Demand Media gives his view on how businesses can improve their sales and revenue.

Many printers will undoubtedly know the article “Printers: three ways to increase profit margins from your clients by over 12%” by Matthew Parker. In his article — and I bet in his handbook too — he lists all the factors I heard the Dutch signage printer I mentioned earlier hint at too. An article by Impressions lists about the same factors while they focus on screen printing.

Costs and productivity are among the most important factors to grow your business and EFI has solutions that can greatly help you in those two areas, but they’re not the only factors you should focus on. Companies who only focus on these two are destined to disappear as soon as there’s nothing more to save on or to increase productivity for.

Improving your client base and a sharply focused service you can provide to them perhaps are the only factors that can keep you afloat and thriving.

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