Running a small business is much different than operating a Fortune 500 company. You may have limited resources when it comes to how much you make in a month or year as well as face limitations as to outside funding sources. If you don’t manage your overhead, the company could lose significant amounts of money […]
Overhead
Cash Flow Surprises That Can Stall Your Business
A company is only as healthy as the cash flow it projects. There are a variety of reasons why the cash flow of a company might suffer. Unforeseen expenses, business expansion, natural disasters, or customer orders drying up at a specific time of the year can be just a few reasons that hamper this process.
The Real Cost of Loss Leaders: Can You Afford Them?
From time to time some companies lose money on projects through labor overages, material overages or mispricing a project. They have to work harder and more efficiently to make up for those losses. But how much harder and how much more efficiently?
Are Declining Sales OK?
Most business owners think that you have to grow your sales from year to year. But is that really true? Volume is vanity. Profits are sanity.
Don’t Be Afraid of Net Profit per Hour
To have profitability you need to know where you are starting with profitability. That means calculating your net profit per hour.
Price Your Product to Provide Value and Make Money
If you sell a product, then the secret to your success will be to offer a great value proposition. That means that your product should improve people’s lives in a way that they deem more valuable than the price you’re asking for when you charge them.
Readers Ask: Overhead vs. Cash?
The bottom of your P&L shows profit—not cash. Remember that profits are not cash. Only the interest payment for loans is covered in overhead. There are also some non-cash expenses such as depreciation in overhead.
Why Knowing Your Overhead Cost per Hour is Important
If your overhead is too high because of spending too much on extras and fancy offices, that can easily be resolved. However, if you’ve cut your overhead to the bone, then you must look other places.
Gross Margin Doesn’t Tell the Whole Story
Your financial report says that you’ve achieved a 35% gross margin on your latest project/job. Should you be happy? Maybe. Gross margin doesn’t tell the whole story.
Choosing a Managed Office for Your Company
There are an increasing number of small to medium businesses choosing to rent managed or serviced office space rather than opening their own offices. This can have a number of benefits including cost savings, access to additional equipment and allowing business owners to do their part when it comes to being environmentally friendly.
