Being an entrepreneur may seem glamorous, but in reality it can be one of the most challenging paths. It can be stressful, exhausting and frustrating, but entrepreneurship can also be incredibly rewarding when done right.
It is your responsibility to be in control of your business. It shouldn’t control you. If you don’t have a firm grasp on your numbers, you are far more likely to become one of the 8 out of 10 entrepreneurs whose businesses fail within the first 18 months. By knowing the numbers that follow, you’ll be sure to beat the odds and grow a successful business.
The Bottom Line
What’s the bottom line? The expression refers to profit, also known as net income. Your net income is what is left after you’ve paid out all of your expenses. If you want to know how your business is doing, start by looking here. If you business isn’t profitable, or isn’t profitable enough, be open to making some changes and stay focused on increasing your bottom line.
Do you know how much money is coming in and out of your business at any given time? Ensuring you have a healthy cash flow is critical to your business’s success. Think about it this way: If an unhappy client decides to leave you because of poor customer service, you can always work harder for your next client. However, if you don’t have the funds available to pay your invoices or payroll, you’re hooped!
You’ll want to come up with strategies for narrowing and closing cash flow gaps as quickly as possible. Some of the important components that affect your cash inflows and outflows are as follows: accounts receivable, credit terms, credit policy, inventory, and accounts payable.
Profit Per Project
When you look at your products, services, and clients, are you aware of the profitability of each? It’s particularly important to know your profit per client or project. This number will help guide you in your marketing efforts. You’ll want to focus on the projects that earn you the most money and require the least amount of time.
Tracking and understanding your numbers is the best way to increase success and grow your business, but your numbers need to be available, up-to-date and accurate. We can help. Learn more about TenjaGo’s bookkeeping solutions today.
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