Business Tips
Many of our Washington borrowers receive monthly postcards with business tips on marketing and finance. Below is the most current card followed by a list of previous cards.
Business Tip #14. . . . Know Your Numbers
Most business owners are very confident and knowledgeable about the product or service they offer. However many entrepreneurs fail to develop the skill of understanding the financial numbers that drive their business. Business owners who understand their numbers have greater control over their business and are more able to be proactive in managing the business. Here are some of the numbers that an astute business owner keeps an eye on and is always alert to what makes them change over time.
„Revenues - Keep track of your sales on a weekly and monthly basis. Compare them to your plan to see if you are on track. If sales start moving up or down figure out what might be causing these changes. Regularly assess the quality and effectiveness of your sales and marketing activities. If they’re not working change them.
„Gross Profit - Sales less cost of goods sold is gross profit. Divide this by your sales and you get your gross profit margin. Gross Profit is the amount left over to pay your fixed expenses. For most businesses your margin should be somewhere between 40% and 65% of sales. If it’s below this range look for ways to trim your COGS. If it’s higher, make sure you are correctly accounting for all your costs.
„Net profit - If this number is negative over a period of time, your business is slowly dying. One of the main reasons for losing money is taking on too many fixed expenses without having the sales to cover them. Every month, go over all your fixed expenses and look for reductions, especially in payroll and occupancy costs.
Additional Tip Cards
For reprints of any of the following cards, please contact Henry Burton at (206) 447-9226 ext. 111 or henryb@cascadiafund.org.
- Business Tip #1 The effects of marketing happen over the long term
- Business Tip #2 Cash is King
- Business Tip #3 Professional Advisors
- Business Tip #4 Familiarity Breeds Business
- Business Tip #5 Never Run Out of Cash
- Business Tip #6 Press Releases
- Business Tip #7 Pricing
- Business Tip #8 Record Keeping
- Business Tip #9 Advertising
- Business Tip #10 Credit Card Debt
- Business Tip #11 Managing Your Website
- Business Tip #12 Marketing Basics
- Business Tip #13 Business Planning
Tips for Child Care Providers
Cascadia also distributes business tips specifically for child care providers. Click here to read those tips.
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