Posts Tagged ‘profitability’

Why there is a need to shift business plans occasionally

Tuesday, January 27th, 2015

Flexibility is of pivotal importance to run a successful and competitive business. Although a thorough business plan is valuable, not everything can be planned. Changes in your business also changes your plans, whether financial or strategic.

Competitors, target group, the market and the financial world are difficult to assess, so you will find that not everything works out according to your thoughts when you first start out. Do not stick to your plans but constantly think about possibilities to improve, from your products to your business processes. Customer requests shall set precedence for change. This is why it is always necessary to adjust your product offerings based on profitability and customer demand.

Furthermore, your sales channels are likely to change. Even if you first focus on direct sales, you might eventually consider alternatives. Intermediaries, online shops, etc. or you might even consider a business dashboard so that the ways of distributions are manifold and help to capture new markets. In this way even small businesses, which former marketed locally, now have the chance to distribute nationwide, or even internationally.

This leads me to talk about international business. Exchange rates affect your business, but can hardly be calculated. Working internationally means often having to deal with several currencies. Supplies are purchased from one country, equipment from another and also a part of your sales are international. This has influence on your costs and revenues and naturally also affects your plans.

In addition, your marketing plan has to be adapted regularly, as marketing offers continually new capabilities. Your target group changes as well. Take into consideration to stay on top of your market. Adjust your budget accordingly and your business plan should only be a guideline.

The joining of a new partner also brings along changes. Targets may shift, new business and financial opportunities. As the business world constantly alters, so will your competitors. Innovative ideas and a larger set of competitors can bring on new challenges if you are not open to change.

Don’t know how to start? My advice. Lidded Crate Hire From PHS Teacrate is the best way to start your business. Get help from business plan writer. A business plan is useful and necessary to guide you. But in order to stay competitive in our fast moving world your business has to change and adapt constantly.


Importance of cash flow

Thursday, November 6th, 2014

High sales figures often lull entrepreneurs into a false sense of security – but high sales figures are not to be compared with profitability. One of the most important figures to determine the value and the financial health of a business is the cash flow.
The cash flow is calculated by all business related cash movements, incomes as well as expenses, within a particular period of time. Also the rate of return of single projects and products can be figured out by calculating the cash flow.
To put it simply, ascertain all revenues of your sale or service, then ascertain all of your expenses, from material costs, labour to energy, etc. – the difference results the cash flow, which can be either positive or negative. A positive cash flow determines the solvency and in this way the value of your business. On the other side is negative cash flow, this however, expresses that a company currently spends more money than it earns. Consequently, in the long run it will have problems to meet its financial obligations.
Investors, managers and banks view your cash flow as a highly informative figure to evaluate your business, because it testifies if it is able to fund itself.