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Profitability Issues

To profit means to yield advantageous returns or results. All companies are in business to make a profit, and they have to be profitable to stay in business. In order to be profitable, there must be a plan. Poor planning yields poor profitability.

  • The lack of strategy development is a symptom of poor profitability. Strategy development is the plan the business has to accomplish its mission, which is the purpose for its existence. Without a clear plan of action to follow, it is easy for a company to become stagnate or even fail.
  • You have to have the ability to negotiate to be profitable. Sometimes in order to get a deal and make it more profitable, you have to know how to negotiate. Read the fine print. No negotiation or poor negotiating skills could lock you into an agreement that restricts the amount of profit you can make.
  • A company must articulate its values and mission, which define its purpose for existing. Without a clear definition, no one knows what they are working towards or why, and if they do not know the purpose, they are "spinning their wheels" going nowhere, reducing profitability.
  • Due to the economic downturn, a lot of employees are being laid off from work. For the ones that remain, they have to take on more roles and responsibilities. If employers do not provide proper outplacement training for such a transition, this can lead to poor profitability. Employees without the proper skill set for their job yields poor productivity which yields poor profitability.
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