Fortex Inc. participated in the Profit & Loss Chicago event last week, discussing the latest industry topics with many of the over 500 FX professionals in attendance. Known for attracting the “Who’s Who” of the FX industry, this networking-focused event also reviewed topics such as:
- FX Volatility
- Changes in Credit Conditions
- The Rise of Algos
- FinTech Game Changers in FX.
The panel on FX Volatility covered the UK’s decision to leave the European Union, uncertainty around the US presidential election, and what the FX market has learned about how modern markets function during times of high volatility.
The conversation on credit focused around clients’ concerns of being able to access the credit they require, as well as how traditional FX prime brokers are adapting to changing uncleared margin rules and capital requirements.
The adoption of algorithmic execution by the buy-side was raised, and while there are obvious benefits to this trend, concerns remain about the market’s ability to handle a runaway algo.
FinTech firms were discussed, specifically reviewing the ability of such firms to help clients reduce cost and find alpha, as well as debating what new technologies are just around the corner. Fortex, being an independent FinTech provider, has solutions to address these topics. We offer trading solutions designed for high-frequency, low-latency performance, which are optimized for buy-side and sell-side institutions, including traders, banks, broker-dealers, prime brokers, and money managers.
For further discussion on these topics and more, please contact Jason Young at [email protected], +1 650 549 7351.
Tactics to help you improve your business’ profit margin
Help boost your profit margins with these tips for increasing profitable sales and reducing costs.
If your sales have taken a downturn, you could work on improving your profit margin until business recovers. This is the time to dig into the detail to see what makes your business profitable, and what actions you might be able to take to make more money from the sales you have.
Here are three tactics you could try.
1. Lower the cost of supply
One way to increase your profit margin is by lowering what you pay other businesses for raw materials, inventory, or any component of what you sell. There may be a number of your suppliers that are willing to re-negotiate your terms of trade or costs to help reduce what you pay.
You could identify your top five supplier expenses and determine if you could:
- negotiate lower prices
- take advantage of discounts through buying in bulk
- receive a discount for early payment, or instead establish if you can pay later
- minimise any waste from production
- take steps to reduce theft
- incentivise staff to find ways to reduce costs.
It can also be a good idea to identify efficiencies, such as speeding up output, introducing lean techniques, and tightening slippage from products being stolen, broken, or returned. Doing this could help lower the cost of production and therefore increase your margin.
2. Sell more high-margin products
Concentrating on promoting and selling the products and services that have the largest individual margins in your business could improve sales and improve your overall margin. Similarly, you could begin to phase out anything with a low margin or switch to something more profitable.
Other options for helping sell higher margin products might include:
- introducing new products and services that have higher margins
- profiling items with the highest margins
- developing premium products or services
- training staff to cross-sell and up-sell
- targeting higher paying customers
- targeting less price sensitive customers who are used to paying more.
3. Review your pricing
If your margin has been impacted by your pricing, and your margin is lower than what is viable for your business, you may need to reassess your pricing. This may not be as hard as it sounds, especially if you have items with low price sensitivity where customers don’t mind as much if prices rise, within reason. Keep in mind to price for the market you serve, to ensure this is the right strategy for your particular business.
You do of course need to weigh up the benefit of a price increase with upsetting existing customers who feel an increase isn’t justified, or the possible loss of a customer who thinks you’re too expensive. If you’re looking to increase pricing, you need to consider how you communicate this clearly and the reasons why to your customer base.
Price increases don’t always need to be large to make a positive contribution to your bottom line either, as even slight changes could have a big impact on profit. You could use your sales data within your accounting software or sales systems to establish which products and services sell the best, and then review your pricing strategy to help decide if they could handle a price increase.
Ways you might review your pricing strategy could include:
- comparing your prices against competitors to see what you could increase
- identifying products where you have exclusive rights so you can charge a premium
- contacting customers to determine if raising prices is possible.
Combining all three of these tactics can help improve your profit margin, as the impact of small changes can snowball when used together. From negotiating better terms with suppliers to nurturing your most valuable customers, you may be rewarded with increased profitability and steadier cash flow which will help make your business more resilient during the tough times.
Running a successful business requires quality information systems to process all the data and statistics, both financial and organisational. If you’re like most, your company has surely come across data problems related to accuracy and reliability that have slowed down your workflow drastically, learn more detailed information about ai ethics.
Reasons to Invest in Information Systems
Minimising human error and maximising work efficiency are the essential goals of any company owner. But they can’t be achieved without an excellent information system which is capable of providing the data you need in a matter of seconds. Investing in business information systems is crucial for every professional organisation, and here is why:
Excellent organisation is crucial for any business which is trying to be successful. With a great information system, your company will be well organised, come up with quick solutions and make faster decisions under any circumstance. The employees will be able to manage all their information and improve the execution of their business processes. Information will be stored in a database consisting of data your employees have registered for the firm.
Quality information systems are featured with an MIS (Management Information System) which is designed to organise the database and thereby improve the productivity of your company. The MIS can provide you with past, present and prediction information by using software that relies on every necessary resource in the system. Without outstanding data organisation, your company’s data is useless and can only cause additional problems.
Perspective on Your Business Future
Any company manager who’s aiming to improve has to establish a broader perspective with the help of a great MIS. Therefore, an MIS can track the complete organisation within your company and enable an easier method for analysing independent processes. These processes consist of organised work activities, information and knowledge to produce valuable products or services. Your company can barely compete with other successful companies without a well-designed and coordinated information system.
By integrating an information system, you are following the latest business trends. It’s a great way to speed up the progress of your company. You will no longer spend a lot of time and money on unnecessary activities – you’ll put your focus on the main goal ahead.
Information systems are convenient when it comes to storing data you’ll need in a few years’ time. For example, successful newspapers keep their photos safely stored in a data archive. The data archive can be opened and used later on to find the photos, if needs be.
Saving your data manually with registers and hard-copy formats will cost you lots of time. Searching for specific data can also be a very time-consuming process this way. A quality information system groups your important data by date and time, making the process of finding it really convenient. Every valuable bit of information is stored in a sophisticated and comprehensive database which is at your disposal 24 hours a day.
Some time ago, companies weren’t able to analyze the share market and their organisation at the highest level, which resulted in a devastating business crisis. Using a high-quality information system, your company can analyze stocks and see their past performance in order to predict a potential crisis. The MIS keeps track of margins and profits to have every data necessary for analyzing and averting a crisis.