July 30, 2019 William Cooper 0Comment

I’ve written several times about small business finance. Unfortunately, the topic is always topical, and many small businesses have serious problems with the fundamentals of finance. Dedicated and dedicated small businesses push the accelerator pedal to the empty gear and do not understand why it has not been possible for years, or even decades, to go from one to two.

If you are concerned with the topic and have not read it, read at least this summary article:

Small Business Finance Fund

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I would like to supplement this article with some things that have been discussed in the past few days in counseling.

Where’s the money?

Many people are convinced that their business is very profitable as they keep track of both revenue and expenditure and there is a nice difference.

However, when I ask him if he is okay, but then where is the money, he has nothing to say to him.

But this is a very simple question. If your company really brings in as much money as you think, then that money should be in your bank account or in your pocket.

If you don’t have that money

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You’ve settled on something. You spend more on the company than you think. Here’s a little investment, a little equipment purchase, a little extra travel and so on.

So you think the company is going well, but if you don’t have the money that your papers should have, then there is something wrong with the system.

How much does each employee produce?

Companies with 20-30 people operate at an extremely low profit rate. This raises the question of what makes such a company worthwhile.

You may want to divide your company’s annual after-tax profit by the number of employees and twelve months to see how much each employee earns each month.

It is often found that an employee produces a quarter of their monthly cost plus that is unacceptable.

In my opinion, an employee must make at least as much profit as a company with a skip. (That is, you have to double your total wage cost: the first half is your salary, the other half is the owner’s gain.)

Make no mistake

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It is not the employee’s fault when productivity is low, but that of the business owner.

You probably work too cheap and with too many people. Another mistake is that you do a lot of work that you shouldn’t because you are paid or hardly profitable.

You have two options: Raise your prices and see what works which only consume your resources but do not make any profit. You don’t have to do all the stupid things just to get tired by the end of the day.

Choose the jobs that make a profit, give up the rest, or just commit to making it worthwhile. Send two-thirds of the people if you need to.