The Lifeblood of Your Business is its Ability To Make and Keep Money

“Money is a terrible master, but an excellent servant.” ~ Barnum

You need money to pay employees, pay the rent, buy supplies and pay other overheads. Provides money to the business owners' and the lifestyle is essential for companies to be able to continue. Without enough of it, your company dies.

Your understanding of the money is crucial because you have to understand and have the money to survive for some time.

Knowing the numbers

If you want to plan effectively, as a business owner or professional, you need to “know what figures. “Knowing the numbers means that you fully understand the financial aspects and the financial condition of your company.

Here is a list of financial facts, you must know your business:

1. Gross revenue: the amount of total income from all sources.

2. Gross expenses: the total amount of money spent to run your business, except for income taxes. Gross expenses include salaries, wages, cost of inventory, phone, office supplies, etc.

3. Net income: gross income less gross expenses. Sometimes it is also called gross profit.


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4. After tax: Net Income waited less state and federal income taxes for your business. This is also called net income.

5. Fixed costs: expenses that are not changing one month to another, regardless of the amount of product or service you are selling. For example, rent, staff salaries, insurance, or anything that has an immutable, fixed cost.

6. Expenditures variables: these are costs that change in Fon 5 a42 Ction of the quantity of products or services that are sold. For example, the cost of the product (it cost you four dollars to produce each CD you sell), sales tax, salaries (hiring someone because you sell more CDs), marketing, etc. . These fees are also called marginal costs.

7. These aspects of your business that are more profitable: each of your products and services will generate revenues and expenses are associated. You must be able to identify the income and expenses that are associated with each product and service, so that you can determine which products and services are most valuable.

8. Net income of your workforce: the amount of profits generated by the workers. Some workers produce goods or provide services that bring in revenue. Subtracting the cost of these employees will result in your bottom line of your workforce. It is obvious that if you are not making a net profit of some people, we must carefully assess your reasons for remaining in their current position.

9. Opportunity cost is the time and money needed to achieve and deliver a product or service. That time could be spent elsewhere, if you are not making or dissemination of this particular product or service. You want to be the most cost-effective delivery or service in question in order to make more profitable use of your resources. It is not in fact a number, but it is something that you have to recognize when analyzing the financial position of your business.

These are the figures based owner of the company that you need to know to make decisions effectively on your business. One of our jobs as a coach and your accountant is to verify that the financial pieces of the puzzle and you already know what you need to get more complete information.

THE LIGHTER SIDE

“Let me tell you what I say to every taxpayer who is sitting in this chair,” said the agent of the IRS at the beginning of the audit Brown. “It is a privilege to live in this great country, and you have to pay your taxes with a smile.”

“Thank God,” said visibly relieved Brown. “I thought you were going to ask for money.”

-Jeff Rovin, 1001 Great Jokes (Signet)

; Wishing you a prosperous and balanced life,

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