Why LED lighting companies do not increase profits?

The bosses, please think about whether your company is in a state of high internal friction. You must pay attention! It's not business. It's business opportunities that have been let go by themselves; not money, but money earned is wasted by bad management! Business is nothing more than to increase income and reduce expenditure, one to earn outside and one to go inside. Even if the business is doing a good job, it must not relax the control over internal costs, so as not to have to earn more outside, and run more inside.

High internal consumption leads to loss of profits

Look at the problem to grasp the fundamental! To do business now is to squeeze out the business of others through hard work, serious and positive innovation, and continuous improvement of their own operating capabilities.

External operating capabilities are largely supported by internal management capabilities, and cost control capabilities are the main form of management capabilities. Therefore, controlling costs is not just about controlling costs. It is also studying how to improve efficiency, how to innovate, and how to reduce internal friction. Otherwise, even if it seizes business opportunities externally, it may not be able to do so, even if it can be accomplished. Output does not necessarily have profitable output.

Discover hidden costs

The costs we are talking about here are divided into two cases: First, we call hard costs, which must be paid, such as staff salaries, vehicle costs, warehouse rents, interest on funds, and taxes. There is also a cost that is called hidden cost. Although it cannot be directly reflected in the accounts, it appears on a daily basis that it will lead to increased costs, increased internal friction, and reduced work efficiency. Specifically, the specific costs of implicit costs Reflections include:

1. The employees go to work on the job and work in a protracted manner. One day they can get things done. Three days are done;

2. Offended customers, leading customers to reduce the amount of cooperation, or even interrupt cooperation;

3, because of poor personal business capacity of employees, resulting in poor sales, high-end products do not sell, slow return;

4. The internal linking and supervision mechanisms are not in place, resulting in the inconsistencies between the various positions of the various departments, thus causing internal friction;

5, because the internal lack of a unified working standards and processes, the various positions of each department to fight, leading to internal friction;

6. The employees that the company has spent at a high cost are losing, and they have to spend money to cultivate new employees.

7. Employees forget or remember the boss's work instructions, resulting in delays or errors in work. Increased implementation costs brought about;

8. The long-term unmoved goods in the warehouse, or the goods that are frequently returned, cause the capital backlog or post-processing costs to rise;

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High internal loss is not only money

Is the loss of high internal consumption just money? there are more:

1. The chaotic management will directly lower the company's image and reduce the external customers' confidence in the company;

2. Lose more business opportunities;

3. The staff’s enthusiasm for work is consumed by the chaotic management. The people’s heart is distracted. There is no way of thinking and there is no way to do a good job and lose the enterprising spirit, not to mention initiative innovation.

4. Some employees found various vulnerabilities in the chaos, which led to corruption. They began to enthusiastically engage in various internal crimes and directly made money;

5. The development plan of the company was interfered with by all kinds of continuous problems. It was wasted, wasting more time, and the goal could not be realized.

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Doing management must be internal and external

As the boss, it is necessary to make it clear that the internal and external issues will not be solved and external development will be impossible. This internal problem can solve the problem of internal friction as the main line. We must continue to introduce the concept of cost in all positions in the company, guide everyone to calculate accounts, and calculate whether they are interested or unintentionally, and bring various internal frictions to the company. Encourage everyone to put forward various ways of blocking internal friction and improve efficiency.

Of course, whether or not employees have the ability to reduce internal friction, at least this awareness must be promoted, so that everyone is conscious, and some employees are encouraged to accept it and gradually extend it to specific actions. All in all, this state of high internal friction can no longer be sustained.