How business becomes like a bicycle
You may have come across a situation where business is conducted in the conditions of permanent loans and credits. This is such a bike: while you pedal - you go…

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What does a business work for and where is the main limitation of profit in retail?
Before we talk about what needs to be done to better manage retail inventory, let's agree on a common understanding of the purpose of any business. Not just retail, but…

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What is a grant and how can an entrepreneur get a grant for business development
A grant is a sum of money for the performance of work or the production of a product, which is given free of charge. In other words, the grant, unlike…

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Effective financial solutions

As a rule, in the field of finance, key decisions are made by the founders. Here each of them believes that he knows how to dispose of money and does not make mistakes. Nevertheless, when you ask them: “in which queue do you pay money to yourself?”, The answer almost always sounds: “at the last.” First, everything is for business, everything is for development, and only then … The main misunderstanding of the structure of financial planning lies in this answer!

Break even
Oddly enough, but having organized a company, the owner must first pay himself. Of course, this does not apply to initial investments, and is related to the period when a business can already exist and make a profit on its own. Ron Hubbard derived 19 unique patterns in the handling of finances that no one has yet been able to refute. One of them is: the organization will always try to spend more than it produces. Often, the owner’s view of the so-called break-even point of his enterprise is defined incorrectly, less than it actually is. In such a company, a paradox is usually obtained: the turnover is increasing, but the profit is not. After all, it is obvious that it is better to earn 80 thousand out of a hundred than 20 out of a million. Otherwise, a situation arises: “Without the heat, as they say, but in business.” Therefore, growing gross income is not always an argument for business success. The ratio of income and expenses is important, and it is the positive difference between these financial indicators that should grow. Then it is a business.

The practical advice here is the following: to correctly derive the notion of the break-even point of your company (that is, to understand where the level of all expenses of a company is actually at the moment) and include payment to yourself in company expenses and start paying it yourself first and not last . The transfer of payment to the founder to the rank of the main items of expenses increases the level of the company’s break-even point. The increased level of necessity makes the group begin to realize that in order for it to function normally, it turns out she needs to earn more money than she suspected earlier.

“The practical advice here is the following: correctly introduce the notion of the break-even point of your company.”

Finance control
By the way, compliance with this requirement removes another painful point that often arises in the financial sphere of a company. By introducing a fixed rule into transferring a certain percentage of gross income to the founder’s fund, the owner simultaneously subscribes to another rule: he, as the founder, no longer has the right to go into the company’s cash desk and withdraw any amounts from there uncontrollably that could have been used to use certain target funds. funds. With this approach to financial planning, the CEO of the company will clearly represent to what extent and for what items of expenditure he can plan his work. You can learn about all the details of financial planning and money handling technology at the training “Financial Director”

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