How do I make my business profitable?
Ask Andi: Biz Finance Advice for Solopreneurs
English - March 31, 2020 09:00 - 24 minutes - 24.1 MB - ★★★★★ - 22 ratingsEntrepreneurship Business Management accounting entrepreneur finance quickbooks smallbusiness smallbusinessowners Homepage Download Apple Podcasts Google Podcasts Overcast Castro Pocket Casts RSS feed
Let’s talk about the P word... Profit! That elusive thing we are all striving to increase in our businesses. I want to help you gain a better understanding of what profit is, how to make your business more profitable, and how to manage and reduce expenses.
Let's start increasing your business profits!
What we’re talking about
What is Profit? How Do I Make My Business Profitable? Tips to Reduce ExpensesWhat is Profit?
In order to have a good understanding of profit, you have to understand it’s three elements: revenue, costs, and expenses. Profit is the amount of money left over after you deduct your costs and expenses from your revenue. Your revenue is the income from your business. Items that fall under the “cost” category are things that are absolutely necessary for you to create your product or service, such as raw materials. Expenses, on the other hand, fall in the “nice to have” category, like taking a client to dinner, or attending a conference.
How Do I Make My Business Profitable?
With an understanding of what profits are, you can define strategies that will work for your business. Increasing revenue might include adding income streams or increasing pricing or the number of customers you have. On the other hand, you can reduce costs or operating expenses in order to increase profit. The best strategy is to take a diversified approach and address all three areas related to profit.
Tips to Reduce Expenses
In order to save money, you’ve got to know how much you’re spending. I highly recommend completing a spending audit at least once per year, but ideally every quarter. Place each line item into one of three categories: essentials, conveniences, and everything else. Go through your lists and ask yourself two questions: “Can I live without this?” and “Is there a cheaper alternative?”. Through this technique, you can create a hierarchy of expenses and figure out what can be cut.
LINKS MENTIONED
https://andismiles.com/2018/01/08/how-to-do-a-spending-audit-for-your-business/
OMG Profit Plan: Income Forecasting and Profit Planning Season with Andi
https://andismiles.com/omg-profit-plan/