A Profit & Loss Statement (P&L) is a summary of all the income and expenses for a business over a given period of time. At the end of a period a profit or loss for the business is calculated by deducting total expenses from total income. The period in question can be any length of time but is typically a month, a quarter of a year (3 months) or a full year. Both income and expenses can be shown listing the amounts for each account or else in summary form. A P&L not only reports whether a business is profitable or not but a detailed P&L can indicate why a certain result is achieved. The amount for each type of income and each type of expense can be compared to a standard. The standard may be a budget or a financial ratio or an industry comparison. These concepts will be dealt with later in the series.
A balance sheet (BS) shows the assets, liabilities and equity of a business at a particular point in time. Again the point in time can be any day but is typically reported at the end of a month, a quarter or a year. A … Read the rest
There are a lot of things to consider for pricing items or services, for instance, the worthy competitors’ prices, the feasibility for your business in the long run, and the consumers’ willingness to pay for your item or service. Well if you think about it, you really don’t want to lose money on items not sold (these are the stocks that gather dust on the shelves) which have no chance of really being sold.
So when it comes to pricing, you should keep all these in mind. Also, selling more at a low price doesn’t necessarily mean you’re doing well profit-wise. I read an article that said otherwise, and the businessman ended up only breaking even. You wouldn’t want that would you? After all the effort you end up where you were at the very start. What’s the point of your business then? Certain schemes on the Internet promise you tips on how to effectively list and appraise your stuff, with more of them turning up to be scams and other whatnot.
There are theories in economics which delve into the phenomenon that is pricing. Consulting economics books would definitely help you in this endeavor. With concepts that include effective … Read the rest
An entrepreneur does not run a business with his or her acute business acumen alone: it comes with leadership skills.
- Be a good example. Startup leadership entrepreneurs must be able to lead his or her business by example. Coming to work early and leaving the workplace late could send a message to the employees that their employer works, too. His or her work ethic must encourage others to follow his or her lead.
- Exude confidence and optimism. A startup deals with what can be called a “baptism of fire.” There are challenges that a startup hurdles as it goes through the crucial first year of operation. In these trying months, an entrepreneur must exhibit confidence and optimism to encourage his or her staff to also believe in the company and the product or service. It is bad marketing for the company if an employee is himself or herself a non-believer.
- Be a doer. An entrepreneur does not only deal with paperwork and financing of the business; he or she is also ready to roll up his or her sleeves and ready to do the work.
- People are your asset. A successful entrepreneur knows that his or her greatest
… Read the rest
It is important that entrepreneurs learn to see the benefits of failure and learn to identify the lessons that can be learnt from it.
Further, it is important that we learn to be resilient: it is easy to be disheartened by a defeat and to become convinced that the idea is not worth pursuing. But no experience should be disregarded, no matter how unsuccessful the outcome.
Failure, in one form or another, is inevitable for everyone, but particularly entrepreneurs. The first thing to do when facing disappointment is to take account of the facts – don’t ignore what’s happened or try to put a too-positive spin on it. Be honest about what’s gone wrong so that you can you accurately identify the lessons and take action.
For entrepreneurs, not knowing whether or not something would have worked can be worse than failure. Thomas Edison is claimed to have said of inventing the lightbulb,
“I have not failed. I’ve just found 10,000 ways that won’t work.”
Whether or not Edison actually said this doesn’t really matter. The point is that someone did and they were right: when an attempt fails, we do not have the result we were looking for but … Read the rest
Follow 80-20 rule.
20% of the work produces 80% of the result. That is the sole pretext on which the rule works. When it comes to employees who hold designations like that of managers, it helps them allocate resources depending upon the importance of a task. Entrepreneur on the other hand, must understand that if he or she is operates in the buying and selling space, then bulk purchases will always provide more revenue than individual sales. Thus, focusing on those bulk buyers will produce better results for his business.
Both employees and entrepreneurs must concentrate their energy on restricted and dedicated activities which can then boost productivity and yield better results.
Have a healthy routine
If you look at some of the top entrepreneurs of the world, all of them have a certain healthy habit which keeps their minds and bodies from giving up and becoming unproductive. Padamsree Warrior, Chief Technical and Strategy Office, Cisco Systems meditates every night and spends her Saturday’s doing a “Digital Detox”.
Healthy routine does not only involve eating healthy but also disconnecting from one’s gadget filled work life. Spending time relaxing your brain is important. Its recovery is vital unless you wish to … Read the rest
Next you need certain tools to conduct your business. You will need a form of communication with your clients or prospects. That may include business cards, letterhead, or stationary, e-mails, phone, and or faxing capability, website and sales copy. You determine your communication methods but all the methods should be professional.
You also need to tag or file your possible prospects, your committed clients, your vendors, and any correspondence and to whom. It is a good idea to keep track of what you are selling, the prices that you have established and any discounts that you offered. Also keep track of whether it is your product of someone else’s. You might consider investing in a good tracking software.
Another thing to set up is any policies that you will implement. Knowing your return policy upfront for an example will help you deal with a future return. Your shipping policy is another area that could get you in a bind. Will you ship locally, nationally or internationally? Who will take care of shipping the product? What will you do if the item is damaged?
If you are in a service industry who will provide the service in your absence or do … Read the rest