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Five Strategies to Boost Profit Margins Selling Microsoft Dynamics 365 Business Central

Friday, March 8, 2024
Reading time: 3 minutes

Being a Microsoft Dynamics 365 Business Central Partner isn’t easy. Navigating profits margins is a complicated puzzle. With Business Central pricing publicly available on Microsoft’s website, you may face questions about why your price is higher, why competitors are charging less, and how you differentiate yourself from the rest of the market. 

This can drastically affect your margins. Moreover, your margins can decrease without you even realizing it. For example, when your sales increase but expenses also rise, the result is a potential decrease in your profit margin.

With decreased margins comes:

  • Reduced profitability
  • Reduced cash flow
  • Limited funds for growth.

To avoid that, consider these 5 suggestions to increase your margins:

  • Identify Financial Leaks

If you are dissatisfied with your profit margins, conduct a thorough examination of your business financials to pinpoint any shortcomings. For example, examine the expense reports. A couple of new amenities for the office might be nice, but will they help you make more money? You can also ask your accountant to perform a financial analysis to find out what products, offerings, and deals bring you the most margin and what brings you the least. The result of that exercise alone can give you important insights for further actions.

  • Break Down Large Margin Targets into Manageable Steps

Having an end goal is important, but it is even more crucial to set small goals you can manage and track over time. With this approach, you can make consistent progress and check your business’s performance.

If your current margin is 5% and your goal is a 30% margin, you will need time to get there. Instead of trying to achieve a huge increase all at once, set incremental goals, like increasing your profit margin from 5% to 7%. (see point # 5 how to reach your large margin target faster).

  • Increase Customer Retention

Increasing your customer retention will increase your margins, because recruiting new customers always involves more time and costs than keeping your existing ones happy. After all, your existing customers already trust you, which opens the door for upsell opportunities.

If you are struggling with customer retention, the first step is to find out why. Interview a couple of customers who decided to leave you and learn why. Talk to your existing customers and find out what they like about doing business with you. These conversations will give you insights into where you need to improve and what your unique selling points are.

  • Enable Your People

Your people are your greatest resource – help them make a bigger difference in your business by enabling them. Inspired and enthusiastic people mean better efficiency, teamwork, and continuous improvement.

This can be achieved with workshops and internal involvement initiatives. For example, running an internal survey on how you can improve your processes to increase efficiency will get you some good ideas!

  • Capitalize on External Resources

To achieve exponential growth, consider capitalizing on external resources. You can utilize other entities’ money, time, experiences, ideas, and existing customer base to drive explosive yet sustainable growth.

This method is the best way to scale up quickly and there are options that require zero financial investment.

If this is something that resonates with you, join us on March 26th at “How to increase your margins in Q2” webinar, where we will discuss how you can capitalize on external resources to easily increase your margin with zero euros in investments.

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