What
it Takes to Succeed in Business!
by: Murad
Ali
Business if tough in today’s world! Most small
businesses go bankrupt or are closed abruptly in the first five years.
Over the course of the next five years many of the remainders also “pack
up” shop and lock their doors. Why do so many businesses fail?
The reasons lie in three main spheres. Those spheres of influence
can be labeled personal, customer, and operations.
The Personal Sphere deals with the owner’s personal
motivation to start a business. For example, if an owner wants to start
their own business, but isn’t willing to make the sacrifices necessary
to make it thrive, then they are at a disadvantage when compared to
other motivated businesspeople. When a business starts for the first
time often it doesn’t have a lot of money. Owners are required to sacrifice
time, money, and happiness to succeed. If you can’t do that, it is unlikely
that such a business will flourish. Many times owners thought they could
handle the hardship but once the novelty of “being your own boss” wears
off they close the door.
The Customer Sphere is one of the most important components
of your business. Without customers you do not have sales, without sales
you do not have money and without money you do not have a business.
Many factors go into generating a good customer base. In the beginning
you must have a cost effective marketing strategy that targets your
intended buyers. This can be done by developing a psychological profile
of your customer and then advertising in those places that they frequent.
Because it is more expensive to get a new customer than it is to keep
one you must make sure they are satisfied with your business and product.
Keep in touch with them by sending them a follow-up letter with a survey.
The Operations Sphere is only second to the Customer
Sphere. In operations you must have an appropriate method of reducing
costs, keeping track of paperwork, and maintaining improvement. Operations
can also take into effect the tax paperwork, accounting, scheduling
of workers, benefits or any non-producing functions.
If all of these three components are well thought out and are appropriately
designed you will increases your chances of survival. Failure to understand
the integral details of your business and what it takes to succeed may
mean failure in the long run. If you are having difficulty putting all
the pieces together then consider a small business consultant.
About the author:
Murad Ali is the published author of “A Call to Greatness: Reforming
the Muslim World” and “An American Mecca: A New Muslim Homeland” available
at most large bookstore websites. He is also the editor of the Muslim
Times and a doctoral student. For more articles like this one please
visit http://www.muradenterprises.org
Is
Your Business Profitable?
by: Pam
Newman
Copyright Pam Newman
What’s your job profitability? Do you know?
Many business owners are unsure of their profitability at a company
or job level. They “think” they are making money because they have a
few dollars in their checking account. Having money in your checking
account doesn’t mean you are profitable. It might simply mean you haven’t
paid all the bills yet, so you have a little cash. Cash and profit are
two different concepts. If you don’t know your exact income and expenses
for each job and your overall business, then how can you know whether
you are making a profit? And, if you aren’t profitable, your business
won’t last long.
Analyze Each Job
Regardless of the size of your business or your industry, profitability
is something you should be monitoring on a monthly basis. To determine
your profit, you must know how much you make and spend on each job.
Expenditures should be tracked for direct labor and material costs on
each job. In addition, you should also be tracking overhead costs and
allocating them to your various jobs as applicable. There is always
going to be some general overhead, but too often dollars are thrown
into general overhead, when those dollars could easily be attached to
specific jobs.
Intuit’s QuickBooks software program has easy-to-use features that allow
you to do job-costing for time and materials, so you don’t have to worry
about having to track it all manually. Rely on tools to help you run
your business more efficiently and effectively.
Are you curious how you are doing with job costing measurements?
Here are some quick and easy questions to gauge your job costing performance:
1. Do I track each customer’s revenue information through a detailed
invoice?
2. Do I have a way of breaking down my direct job materials cost by
customer?
3. Do I associate all time spent to each job accurately with actual
dollar amounts?
4. Do I have access to reports to monitor profitability on each job
in a timely manner?
5. Do I have a way to trend the fluctuations in job profitability from
job to job, month to month, etc?
If you answered “no” to any of these, then it’s time for you to take
an objective look at your financial goals. It’s time for you to implement
a job costing mechanism to help you answer “yes” to all these questions.
How can you track your profitability and long-term growth plans if you
don’t have detail at a job level?
QuickBooks Can Help - Compare
QuickBooks 2008 Editions
Here are some easy ways to utilize QuickBooks effectively to
help you with your job-costing process:
1. Set up the QuickBooks Item list so that you’ll have both an expense
and an income aspect to each of the items. This will allow you to track
your costs and your income, and will provide you profit by item.
2. Record your sales through the invoicing or sales receipt process.
This will record the income aspects of the items.
3. As you purchase the product or service items, make sure that you
utilize the Items tab so that it will record the cost to the appropriate
item. In addition, make sure to assign your customer/job information
to each line item so that you’ll have the costs associated to the appropriate
customer/job for job-costing.
4. Utilize the time-tracking mechanism in QuickBooks so that you and
your employees can track time by item and customer/job. No dollar value
is associated with this time until you actually pay the employees within
QuickBooks.
5. QuickBooks has preformatted reports that you can access to have job-costing
information right at your fingertips. These are found under the Reporting
menu and the Jobs/Time/Mileage option.
6. QuickBooks has the ability to provide reports for any time period
you select. This will allow you to have a variety of detail over the
growth of your business and to produce trending reports. You can modify
the report as needed to meet your needs.
A good accounting professional can help you understand what these reports
are telling you, in terms that you can use. Reports alone don’t provide
value if you don’t understand them. So it is key that you understand
the reporting information and how you can use that information to assist
you in decision-making as you grow your business profitably.
Job-costing is easier when you set-up your accounting/bookkeeping software
package and know how to use it. So, challenge yourself today to become
more adept at running a financially savvy business through job-costing.
Then, you’ll know, without a doubt, whether your company is profitable.
About the author:
Pam helps business owners keep money from slipping through their fingers.
She is a Certified Management Accountant, Certified QuickBooks ProAdvisor,
and Author of Out of the Red and Unlocking the Secrets of QuickBooks.
For more information, you can visit our website at http://www.quickbooksinformation.com
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