Читать книгу 19 Ways to Survive in a Tough Economy - Lynn Spry - Страница 29

Understanding your net revenue is one of the best ways to begin your financial review. Your net revenue is the gross revenue amount (i.e., the total of all of your sales) minus the cost of goods sold. The cost of your goods can include the cost of the products themselves, the costs of shipping the product, and any other costs for the goods or services you sold. This net revenue allows you to see how much money your business makes before the business expenses, such as overhead, salaries, benefits, and other items are paid. In order to understand where you can cut expenses, you must first understand how much money the company actually takes in on a monthly basis.

If you have ever completed a budget for your business or use an accounting program, you will be able to easily find the net revenue for each month. Review these numbers for the last year. What you will probably see is that your monthly net revenue has varied significantly over the last 12 months. Business cycles, vacation periods, and increases in costs all affect the net revenue. In some months your business may have been profitable, in other months, your business may have lost money.

Since you are trying to complete a budget that can work during both difficult and profitable months, use the month with the lowest net revenue in the last 12 months for the budget. This number will be the basis for your budget. Very often owners use averages to run their business expenses. The idea here is that many businesses are cyclical and therefore, one really good month will make up for many bad months. For instance, many retail stores rely on their business making significant sales in December when holiday shoppers abound. However, depending on unusually high months to make a store profitable means that the rest of the year, the store is allowed to either break even or lose money, which is an unsettling way to run a business. If the “big month”doesn’t materialize, the company can be in a difficult if not impossible financial position. During December of 2007, many retailers were hit with an unusually slow holiday season. Small businesses were even more affected, as consumers headed to discount stores over “mom and pop” locations. This surprise hit many businesses unexpectedly, greatly reducing their 2007 earnings.

Instead of counting on the best or even an average month, begin to look at your worst month for an indication of how much money your business can make. Using lower than usual net revenue will make your budget estimates much more predictable during difficult financial situations. Even during slow seasons, difficult economic conditions, and unusual market turns, this net revenue amount will represent the approximate amount of income your business can generate. Ideally, all of your expenses should then be reduced to less than this figure. This will create a predictable budget that will allow your business to become profitable as quickly as possible. Instead of losing money during difficult times, your business will be able to sustain itself and focus on growth, not on fighting a losing battle against the mounting debts.