15 Ways on How Profitable is Coconut Business
How Profitable is Coconut Business: Coconut has the potential of generating over N10 billion annually for farmers and agribusiness entrepreneurs.
For example, some state has the potential for the production of more than 10 million coconut trees.
With annual production of over 1 billion husked nuts worth over 45 billion.
Total yield: 25 x 80 = 2,000 nuts per acre. The income from the farm: (total yield x sale price of each nut) = 2,000 x 25 = Rs 50,000. Profit from the farm: (total income – total investment in the 6th year) = Rs 50,000 – Rs 26,400 = Rs 23,600.
It’s not just your price list that affects your profitability – the type of customers you‘re selling to can also make a big difference.
Focusing on your most profitable customers – even if it means letting the less profitable ones go – could boost your profitability, so long as it is handled carefully.
There are two key strategies for boosting profitability through sales.
Selling more to existing profitable customers and finding similar customers to sell to.
How Profitable is Coconut Business:
10. Work with your best customers
You should know who your best customers are, what they buy and when they buy it.
You can usually put your customers and the products or services they buy into one of four categories:
- high sales and high profit
- high sales and low profit
- low sales and high profit
- low sales and low profit
It makes sense to encourage customers that provide high sales and high profit.
You can also significantly boost your profitability by nurturing customers that provide high profit on low sales.
If customers are providing low profit from high sales, you can maybe revise pricing to generate more revenue from them.
If customers are generating both low sales and low profits.
Consider whether it’s worth your while continuing to do business with them.
11. Find new ‘best’ customers
Make a judgement on expanding your customer base by finding new customers who have a similar profile to your existing profitable customers.
If you are sure you have covered your existing market as much as you can, consider moving into new markets.
How Profitable is Coconut Business:
12. Expand your market
Moving into new market areas can transform a business and, handled correctly, can significantly increase your profitability. However, expanding into new markets can be risky – and mistakes can prove very expensive.
13. Do your research
Before you start, carefully research the potential opportunity. Can you tailor or adapt existing products or services for new markets? This can provide new revenue at minimal cost and is ideal for boosting profit. For example, if you manufacture tools for the garden market, are there any potential applications for the tools in the construction industry?
Do you understand who your potential new customers are, why, when and how they will buy the product or service and how much they will pay for it?
You can also use social media to do research and gain alternative insights, opinions and feedback from your customers.
How Profitable is Coconut Business:
14. Developing new products and services
If you‘re developing a new product or service for a new market, it’s good to carefully consider its viability. Key questions include:
- Do you have the skills and expertise in-house or will you have to buy them in?
- Have you got the commitment and resources available to make the new project work?
- Can you minimise the risk?
- Can you be sure there‘s a demand for the new product or service at a price you can make a profit on?
15. Sack underperforming suppliers, customers and staff as appropriate.
This gets rid of the suppliers, customers and employees who make the working day more stressful.
This will create a better working environment for your team and remove any customers who are losing you money.
How Profitable is Coconut Business:
Conclusion
Improving your business’ profitability can help you to reduce costs.
Increase turnover and productivity, and help you to plan for change and growth.
How you increase your business‘ profitability will depend on a number of factors.
Such as the business sector you work in, the size of your business, or its operating costs.
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