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Why is business stagnating?
Why has turnover fallen?
What do I need to keep the company going?
These are questions that often plague most entrepreneurs. Fortunately, all the answers are available. And they are right in front of you - in your company's numbers. In the numbers you can see not only the problems, but also the solutions, the growth points.
In this article, I talk about the first 5 indicators that need to be monitored to see the full picture.
1. APYVARTA
Yes, everyone controls this indicator, but they do it the wrong way. For example, they think that revenue is the money the company has not yet earned. At first it seems that everything is agreed with the customer, but after a while they may have to return that money when the customer changes his mind.
Count only the money the company has earned.
2. OPERATING COSTS
These costs are divided into fixed and variable.
Fixed costs - costs that the company incurs in any case - rent of premises, licences, part of staff salaries, etc.
Variable costs - costs, which depend on the company's turnover. For example, taxes, employee bonuses, cost of goods and services, etc.
Keeping them will help you plan your next steps and help you calculate your company's breaking point. [Use this tool]
3. EBITDA
EBITDA - A measure of a company's performance equal to its earnings before interest, tax, depreciation and amortisation. It measures the profitability of a company.
4. OTHER OPERATING COSTS
Expenditure that is unexpected, unplanned and not classified as fixed or variable. For example, you unexpectedly decide to organise a staff outing or write off a bad debt.
Such costs need to be deducted from the total and the percentage they represent needs to be worked out. Use the resulting percentage for future periods, in which case you will know how much you need to set aside fource major Cases.
5. NET PROFIT
Net profit should be split between company and personal profit. You will pay the personal profit to the owners of the company and keep the rest in the company. The profit remaining in the company should also be split in two: one part should be allocated to investment and development and the other part to the financial reserve.
Knowing and managing these numbers will allow your business to grow and cope with crisis situations.
Before booking a consultation with a specialist, please write your question.
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