Search:

Home | Business


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

By: Stan the Mann

"Money is a terrible master, but an excellent servant." ~ P. T. Barnum

You need money to pay your workers, pay the rent, buy supplies, and pay other overhead. Money provides the business owners' lifestyle and is essential for the business to be able to continue. Without enough of it, your business dies.

Your understanding of money is crucial because you must have and understand money to survive for any length of time.

Knowing the Numbers

If you want to plan effectively, as a business owner or professional you must "know the numbers." Knowing the numbers means that you fully and completely understand the financial aspects and financial condition of your business.

Below is a list of the financial facts you must know about your business:

1. Gross income: 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 wages, salaries, cost of inventory, phone, office supplies, etc.

3. Net income: gross income minus gross expenses. Sometimes this is also called gross profit.

4. After-tax income: net income minus anticipated state and federal income taxes for your business. This is also called net profit.

5. Fixed expenses: those expenses that do not change a month to month, regardless of how much product or service you sell. For example; rents, officers salaries, insurance, or anything that has an unchangeable, fixed cost.

6. Variable expenses: these are expenses that change according to the amount of product or services that are sold. For example, the costs of the product (it cost you four dollars to produce each CD that you sell), sales tax, wages (hiring someone because you are selling more CDs), marketing, etc. These expenses are also called marginal expenses.

7. Those areas of your business that are most profitable: each of your products and services will produce income and have expenses associated with it. You need to be able to identify the income and expenses that are associated with each product and service so that you can determine what products and services are most profitable.

8. Net profit from your workforce: the amount of profit produced by workers. Certain workers will produce products or provide services that will bring in revenue. Subtracting the cost of having those workers will result in your net profit from your workforce. It is obvious that if you are not making a net profit from certain people, you need to carefully assess your reasons for keeping them in their present position.

9. Opportunity cost: this is the time and money it takes to make and deliver a product or service. This time could be spent elsewhere if you are not making or delivering that particular product or service. You want to be delivering the most profitable item or service in order to make most profitable use of your resources. This is not actually a number, but is something you need to recognize when analyzing the financial condition of your business.

These are the basic numbers any business owner like you must know to effectively make decisions about your business. One of our jobs as a coach and your accountant is to ascertain what pieces of the financial puzzle you already know and what areas you need to obtain more complete information.

THE LIGHTER SIDE

"I'll tell you what I tell every taxpayer who sits in that chair," said the IRS agent at the beginning of Brown's audit. "It's a privilege to live in this great country, and you should pay your taxes with a smile."

"Thank goodness," said a 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,

Article Source: http://www.newagelivingarticles.com

Stan Mann, C.P.C. supports business owners, top executives and commission salespeople to substantially grow their business and have a balanced life. He is a Certified Professional Coach. For additional articles and resources please visit www.stanmann.com I deliver customized coaching programs to help you become the leader of a highly successful and highly satisfying business.

Please Rate this Article

 

Not yet Rated

Click the XML Icon Above to Receive Business Articles Via RSS!
Additional Articles From - Home | Business


banner











Sign Up for a free account or learn more.
Article Directory Software
Click here to download the exact software that powers this directory for FREE. Start your own article directory today!
Google














Top Authors
Submit Articles
Member Login
Most Popular Articles
Submission Guidelines
Ezine Notifications
Article RSS Feeds
Little Book Of Becoming
Masters of the Secret
The Singularity Is Near
Distribute Your Articles to 1000's!
Wildwind Enterprises
Bookstore
About Us
Link to Us
Contact Us
Privacy Policy
Terms of Service
LINKS

All Links DirectoryAll Links Directory is 100% SEO friendly Directory and Human Edited.

Dominate The Search Engines with this software

Make Money Being an Affiliate with this software it's easy!

Learn How to Make Daily Profits Online starting Right Now!

Idiot Proof Clickbank Trick Makes $6,513 In 24 Hours

Amazing New Discovery: True psychokinesis easy to Use. Learn to control it for manifestation, healing, karmic repair with chakras.Visit us to find out how This Is 'PK' Mind Over Matter (Ebook, Free Download) fosters positive permanent change!

Submit Your Articles Quick and Easy with this software!

Get Keyword Elite and never hunt for keywords again!

Gaiam.com, Inc
Spiritual Cinema Circle
Visit the metaphysical directory for a complete list of metaphysics related websites.
Royalty Free Images
NewAgeLivingArticles.com » Copyright © 2007-2009 WildWind Enterprises
Terms of Service | Submission Guidelines | Contact Us | Link to Us| Privacy Policy | About Us | Article Submissions With A Click 100's of Sites!

Powered by Article Dashboard