Starting a business can be a big challenge in itself. However, once you start, ensuring it grows and turns profitable is a bigger challenge. It can get easier if you keep the critical information about your business handy. While every business can have different parameters of success, there are 7 things which are common to every business and critical in ensuring it is profitable. Also, these are VERY helpful when you are looking to apply for a business loan.
7 Things Every Business Owner MUST Know About His / Her Business
Every business owner must be aware of the following 7 things for their business:
- Revenues: You must keep a proper track on how much is your revenue
- Your income from the sale of goods and services of your business/company
- Turnover: Calculate or know your yearly turnover which would help you understand how quickly your business is capable of collecting cash.
- Stock duration: You must know the time for which your product stock are lasting in the market.
- Initial Investment: Always remember the process by which you managed the initial investment for your business. This information also comes in handy when applying for a small business loan.
- Gross Profit: You can calculate Gross Profit by a simple formula: sales minus cost of goods sold.
- Net Profit: Net profit is Gross Profit minus your taxes. In other words, it is Sales minus (cost of goods & taxes paid). This is the critical ‘profit’ that matters more than the gross profit.
- Growth Target: You must have a Growth Target (GT) for every year. How much do you want your business to grow? It could in terms of Net Profit or Revenues, etc.
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