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Although companies selling products normally have actual and existing customers in mind, it is equally important that they should consider future or potential customers for their products. It follows that as a company expands, its profits should logically increase. Although it is sometimes difficult to ascertain whether expansion increases profits or vice verse, it all depends on the manner of expansion adopted. Expansion in sales volume often requires more effort and more attention depending on the needs of the customers. More thought should go into the selling process and perhaps longer hours and greater effort must put into improving customer relationships and services. However, any such exercise must be closely monitored to ensure that the extra cost incurred does not exceed the additional sales made or the results will be negated. This is because, thinking that profits will increase by the same margin as sales made, might actually be wrong. In reality, the increase in profit rarely rises constantly. A business owner can opt to lower total cost and so enable his/her business to operate with a higher profit margin to obtain a higher volume of business. Another option could be to lower prices or offer some other inducement; such as free delivery. In these circumstances, the profit percentage may just fall. Is there an advantage in selling more products at a lower profit rather than fewer at a higher profit? How far is such a decision related to forecasts of future sales? Such questions should be pondered by any business management as they weigh the choices open to the organization. In addition, they should be able to predict what the market response might be at different volumes of sales and output, so as to make the best decisions. Stephen is an Business Organizing Expert . He researches and studies on big and small business strategies . Website:- Business Management Solutions for efficient business operations.
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business sales, sales promotion, production output, customer relationships, business management, increases profits, potential customers, sales volume,
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