1. The Johns Hopkins Business and Consulting Club
Increasing Sales and
Reducing Costs

2. Increasing Sales Two Steps
1- Think about the relationship between sales and profits
2- Determine action

3. Increasing Sales Step 1: Think
Increasing sales does not necessarily mean increasing profits
Think about the relationship
What can be done?

4. Increasing Sales Think (cont’d) What do you need to know?
1- How are we growing relative to industry?
2- What has our market share done lately?
3- Do we know what customers want?
4- Are our prices competitive?
5- Competitors marketing and development?

5. Increasing Sales Step 2: Take action Four Ways to increase sales:
1- Increase volume (more buyers, distribution, marketing)
2- Increase amount of each sale
3- Increase price
4- Create seasonal balance

6. Reducing Costs Two scenarios: 1- Decrease in profit margin
2- Surge in costs
* Two different causes result in the same need

7. Reducing Costs 1- Decrease in profit margin
Step 1- Ask for breakdown of costs
Step 2- Investigate suspicious costs
Step 3- Benchmark competitors
Step 4- Investigate labor/cost saving technologies

8. Reducing Costs 2- Surge in Costs A- Investigate internal costs
- Union wages
- Suppliers
- Materials
- Economies of scale
- Increased support systems

9. Reducing Costs Surge in costs (cont’d) B- Investigate external costs
- Economy
- Interest rates
- Government regulations
- Transportation/Shipping strikes