What do your numbers look like?
| TERMS YOU SHOULD KNOW AS A BUSINESS OWNER | |
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| The money that is brought by the business activities of a company is known as revenue. Depending on the methods employed by the company, revenue could be calculated in different ways. | | | Managing the net amount moving in and out of a business is key to accomplishing long time term goals. | | | Business growth is the expansion of the company in terms of growth in revenue, customer base, market share, or producing more goods. There's no universal formula for calculating business growth since each company is a unique ecosystem. Still, an increase in all these aspects indicates business expansion. |
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Busting Myths About Revenue, Profitability and Business Growth
| 1.) I should worry about the business, my accountant can worry about profit: Many chief executive officers (CEOs) have no idea how profitable their business is until their accountant tells them. This is worrying: CEOs are responsible for managing resources effectively, and that includes setting a yearly budget, and regularly measuring revenue and expenses. Not knowing if the bottom line is growing or shrinking, is like flying blind. | | 2.) Since profit goes into my pocket, I'm the only one affected if we aren't profitable:
Some entrepreneurs do not understand that profit is what funds the development of new products, enables you to hire additional people, expand into new markets. Your company needs to be profitable in order to grow. | | |
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| 3.) Profitability is not important because I pay myself a salary:
Profits are the way to compensate the founding entrepreneur/investors for the risks taken to start and grow a company. Think about the profit you expect to get from investing in stocks, superfunds, or property. You should expect to receive at least that much profit at the end of the year from your company because you are investing both your money and your time. | 4.) Being "profitable" means we are "ripping off" customers:
The trick is to find out what customers are willing to pay for the "value" being delivered, and then offer it to them. | 5.) Believing that there's one "silver bullet" to profitability:
In fact, small changes in the price and number of sales, coupled with small changes in the cost of goods sold and in operating costs can impact your bottom line by 10-30%. Encourage your employees to come up with suggestions about small marginal changes in the development or delivery of your products or services, then give a "shout-out" to the ones who help you become more profitable.
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| A finance team is one of the most important elements for proper management in your business for better financial function and progress. Decimalytics is leading the industry as a small business finance team. |
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CONTACT US...
Business needs help? Hire Decimalytics as your finance team to handle your needs! You can directly contact our Account Manager, Daniel Mendoza, at: admin@decimalytics.com
Speak with a representative from 10 am CST - 5 pm CST Toll-Free: 866-986-0994
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