How to Increase Your Bottom Line

When you run your business or are employed to oversee financial matters of a company, the question that comes to your mind is how to increase the bottom line, i.e. profits. Increasing bottom line can be a challenging task as it involves several factors that should be handled well to help you achieve your targets.

Especially in a jittery economic scenario, the need to increase the bottom line becomes even stronger as it is common for companies to go out of business after they see their profits shrink.

You will need to take into account not just increasing sales or revenues to boost your bottom line, but other factors like expenses, management and production as well.


  • 1

    Boost sales revenues

    The first and foremost technique to increasing the bottom line of your organization is to boost sales revenues. Since revenues are the lifeline for your company’s survival in the market, you should know ways to increase sales in a market packed with tough competitors. If you are into services business, try to offer them to a wider audience.

    As a production business, your focus should on producing maximum number of units/products and reaching as many new customers as you can. When you increase revenues, the money starts flowing in and you are in a position to meet your costs and expenses without any trouble, hence increasing your bottom line.

  • 2

    Lower cost of goods sold/cost of service

    If it has become increasingly difficult for you to find more new customers due to highly competitive market, another method to increase your revenue is to lower the cost of goods sold or cost of service (if you are into services business).

    Controlling cost of goods sold (productions costs) will allow you to get higher gross profits, which will then help you meet expenses and taxes more easily. Higher gross profits often result in higher net income or bottom line. Employ effective cost accounting techniques to lower the cost of production.

  • 3

    Cut back on salary expenses

    Tough economic conditions have caused many employers to cut back on their salary expenses. Whenever profits start to shrink, salary expenses are the common factor that must be addressed in order to help put the company’s financial health back on track. Try to assess which employees are expendable. If you have hired more employees than a specific unit requires, the best option is to let a few of them go.

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