Being More Successful In Your Business
- Author: Simon Levy
- Published Date: July 16, 2019
Do you actually understand your business and can you make it even more successful?
Although you may be in business because you love what you make, create or sell it is vital that you have an understanding of the financial aspects in order to survive and thrive. Looking at the finances of your business can be complex and requires a good comprehension of the underlying numbers. Most of us can’t wait for the day when they can drop maths at school and assume that that will be the last they ever see of maths formulae and calculations. But in business, you have to understand your firm’s finances in order to understand how much money you are making.
But it doesn`t end there.
Running a restaurant is complex – you have to be able to price the menu in such a way that you will earn enough money from the meals and drinks you sell to be able to cover all your costs and still have enough money left over for you to live on and make a profit. Once you have done that then you need to build a forecast for the months ahead in order to make sure you have sufficient cash flow to pay the bills when things go quiet.
All marketing, be it adverts, loyalty cards and affiliate websites need to have a mechanism for measuring if you are getting good value for the money spent. This needs to be done alongside other areas such as understanding which menu items are the most profitable, which are the most popular and which seating time is the busiest for you.
The mechanical production of accounts and reports does not help unless you have the ability to interpret what is happening and to take action to remedy or maximise net income.
If you are looking for any form of bank financing to help the development of your business, then the development of a business plan will be a key ingredient. Whilst the basic outline of a business plan describes what you do and how, the guts of the document must be the financial forecasts and plans that demonstrate, to the prospective lender, that you are in control of and fully understand, your business.
You don’t need to worry about doing all of this yourself – your accountant is there to help you pull all relevant information together.