Do not reduce your Profit margins. Don't let your business bleed,High Profit is Risky, but Low Profit may prove fatal.
Gross profits should never be celebrated, or taken seriously, as the actual thing is net profit at the end of the day. Whether in service industry, FMCG or B2B, sometimes to meet the competition or under the pressure of clients, we start compromising our profit margins, so that we could retain our customer or market.
This reduction in profit margins ultimately effects all of the business operations, like you have little funds for salary increase and other incentives of the team members, so ultimately, good team members start leaving you. Due to shortage offunds your R&D slows down, you are not able to upgrade your plant and machinery, you can not update your over al/ infrastructure, and you are not able expand your business
And the client for whom, you had compromised your profit margin, also leaves you, as you could not give him the quality, that he expectedfrom you. So always remember, quality has a cost, and this cost can be covered by good profit margin, not by obliging only.
Low Profit, high turnover, is not applicable in all the scenarios. So, first identify your target market, your strengths, weaknesses, the market opportunities and threats very carefully, and then enter the business very carefully.
This is also a fact that, too much profit or extra profit, as compared to your industry norms, may also force you out of the market, but very little profit may completely wipe you out of the business. So extra profit is very risky, but very low profit is fatal.
As there are some universal principals, not for Muslims only but for all others too, Like::: those, look after others well, deal politely, who work hard, with honesty, sincerity, professionalism, have patience, vision, and have gracious hearts, normally, succeed in the business and other routine world matters too.
In Last, Remember: Allah Ta//a, also help those who help themselves. We have to do our best,with honesty and sincerity, and then leave the result on Allah the Great,In Sha Allah you will always succeed.