Do you have what it takes to quit the 9-5 grind and start your own business? Running a small business is much harder than people realize. Your business needs to run like a well-oiled machine. That means reading the fine print. Everything needs to be in order, including the budgeting. Finances are a big part of a business. Now, I am going to show you how and why.
1) Profit and Loss Statements
Time to face your fears. You need to know everything about your finances, including your debt ratio and your cash flow. Did you know that your cash flow grows your business and pays your bills? It is not the revenue. There is a difference. How can you pay down your debts when your cash flow every month is small?
2) Too Much Money Makes You Do Stupid Things
It is similar to someone becoming rich and famous before they are ready. The money goes to their heads. Why do you think they get into so much trouble. A lot of small business owners throw cash at the problem. They should use their brains instead. More cash does not make the problem go away. In fact, it is going to create more problems for you. You need a budget.
3) Value Added
Just because a customer buys a lot, that does not mean they are coming back. It might have been a one-time thing. Value is not always about the money. Does the customer come back for more than one shopping trip? Do they refer others to you? Do they value quality over quantity?
4) What About the Sales-Close Ratio?
Are your bids to high? That means you are not talking to enough people, or your prices are too low. Are your bids to low? You might not be getting the right people to qualify for your brand.
5) Money Management
Being able to manage your company debt is a crucial part of running a business. If the company goes into debt for whatever reason, being able to know how to pay it off will mean the difference between keeping your doors open and having to shut them for good.
Only you know what is right for your business. However, paying attention to these simple tips can help you go along way in your business dealings. Time to put on your business bonnet and get to work.
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