3 Areas to Assess Business Operations for Profitable Growth
A successful business doesn’t just meet their targets, they aim to achieve higher than their goals. By delivering maximum output, managers are able to add growth and profit to the organization.
Executives leverage three areas of business operations to create an efficient system: revenue, output, and cost control and risk management. All three areas function independently, but there are common areas of cooperation between them that help boost output and profit.
1. Revenue Operations & Cost Control Management
All activities that bring in money to a company add to its revenue. In addition to sales, there are other areas which increase cash flow like marketing, public relations, and brand image.
Quite often those operations need to be controlled by cost and risk management. Through sales projections, budgets, pricing, asset and inventory management, and contracts, they can keep expenses under control. Striking the balance between maximum revenue and minimum costs is a tricky one, but one that is possible.
2. Revenue Operations & Goods
Every business has a product or service they produce or deliver to customers. Whether it is something you can touch or something intangible like that iPhone app you just downloaded. Delivering a product or service entails designing, research, production, and fulfillment.
Because your goods are the very reason customers come to you, they are the primary source of revenue. Lots of activities that go into making a product or service intersect with revenue generation. Whether it’s your product or service development, pricing, customer support and retention – they are all directly or indirectly linked to revenue.
3. Cost Control and Risk Management, & Output Operations
Although risk management and cost control are not the same, they are closely related to each other. Controllers create and manipulate the company’s budget based on the risk analysis of certain projects and plans. Together they steer projects in the right direction and limit financial shocks.
One of the most important tools used to keep track of expenses is the budget. It coordinates production operations with the financial ones using inventory management and asset management. Costs that go into purchasing supplies and processing materials are also communicated between the different functions to limit unnecessary spending.