You should know that your business should not require a huge amount of investments, which increase each time. If you are faced with this situation and your business brings you only problems and losses, then urgently need to fix it.
⬇️Common mistakes of entrepreneurs
🔍Do you think that all business money is yours?
Many of the entrepreneurs are prone to the erroneous judgment that since they own a business, all the money belongs exclusively to them.
🔍You are in pursuit of increased sales
Often, entrepreneurs begin to count the amount of funds in the company’s account. It is important to consider not the money in the accounts, but the profit and work efficiency.
🔍Cannot quantify management decisions
An important skill is considered to be able to evaluate everything in your business through the prism of profit. Not all entrepreneurs know how to do this. Therefore, even their best solution can be unprofitable.
How to avoid such situations?
✔️Take money from the business yourself in accordance with your roles
You have two of them: the owner and director. The owner is entitled to dividends on profits. Determine what percentage of profits you will take for yourself and stick to this number. The director is entitled to a salary. The dividends and director’s salary are yours. The rest belongs to your company
✔️Remember that revenue growth is not always profit growth
Any book on economics says: with increasing sales, the price drops and costs per unit of goods increase. It happens that one sells 10,000 units of goods per month and works at a loss, while the other sells 1,000 units — and he is doing well.
✔️Create a financial model when you plan to change something in the business
The financial model shows how a change in one indicator affects all the others, including the most important one — net profit.
The main indicator that the business is working efficiently is the profit. You need to evaluate each action in terms of how it increases it.
What problems did you encounter?
