The second day there is no lunch business. Why Your Business Isn't Going - Five Top Reasons. Efficient business - what is it

Budget. Cost price. Price. These “money” topics are raised in my consultations one way or another on a regular basis. And regularly I advise you to address these questions to a financial coach. That is, to a person who knows exactly where the money comes from and where it goes. For example, to Natalia Rudovskaya my guest today.

Natalia, of course, today we will talk about money. For example, how to define new price to your product.

Great, but before answering questions, I want to clarify the meaning of the word "money" in the context in which I will talk about them. Money is the result of the actions that a person produces. Not a form of exchange, not an equivalent, as economists say, but the result of actions.

That is, we need to a certain amount of actions, spend a certain amount of energy to get a result. It is reflected not only in emotional components, but also in a certain amount of money. Money is the result that we get from our activities.

Then my question can be slightly reformulated. How to get new financial results? Or, what is asked much more often, how to decide on a new price?

First, you need to calculate everything and draw up what I call the “project budget”. This budget can be roughly divided into three components. Fixed costs, order fulfillment costs, and finally the profit we expect to make plus reserve funds. All these components form the budget of the activity.

Fixed costs are costs that we incur regardless of whether there are orders. This includes mandatory items, such as office rent. Very often they tell me “I don’t rent an office, I work at home or I sit on someone’s head or in a cafe, in a coworking space.” But it's still a cost. Let's say if I need to work in seclusion, I look for secluded places. Even a cup of coffee in a cafe or coworking space costs money - and this must be taken into account. Plus, I always recommend putting in the average rent you'll need if you start working on a regular basis. How much will I have to spend on an office where I will have to sit down myself and put one or two people that I will have when I leave the level of an artisan to the level of an artel worker or workshop.

- That is, when will hired employees appear?

Yes exactly. I want to note that at the moment when the owner himself is hired to work for himself, there is one trap that is important to get around. The owner can be an administrator, director, manager, engage in sales or expertise. But in all these cases, he must receive his salary. Simply because sooner or later, when the business moves to another stage, responsibilities will have to be delegated. Otherwise, he will not be able to develop. To perform the former duties of the owner, you will need to hire a person, and you need to understand how much he will receive for such work.

All fixed costs, including fixed taxes and wages, must be accounted for. This is the level of survival of any business, business, work.

When I calculate this indicator for any client, I tell him: here is your point, below which you should not fall. And if you stay close to this level all the time, then your business starts to sink.

- So, we figured out how to keep the business afloat. But I would like it to be profitable as well.

Of course. To do this, you need to calculate two more budget categories. The first of these is the costs associated with the execution of the order. Here, too, as a rule, items of expenditure are prescribed, the fund wages people who are involved in the performance of this service, bonuses, if they are paid.

We also include the costs associated directly with the execution of the order. Purchase Supplies, courier, transport costs. They must be calculated, those articles that appear directly with the order. When there is no order, these costs are also absent.

The third level of the budget is the net profit of the owner and reserve funds. Net profit is what I want to get by doing this business. Many don’t bet on this, thinking in the spirit of “I like it, I’ll try how much they pay.” At first everything is great, but then the business collapses, when the flow of orders increases, the time is busy, but there is still no money. The price was incorrectly calculated, it has to be changed. And this is not always convenient, especially if you have already promised customers to provide a service or provide a product at a certain price. But if this is not done, it may turn out that you work without profit, or even at a loss.



- That is, the profit that you want to get should be included in the budget at the start?

Yes, definitely. If these are permanently implemented services, then on a monthly basis, if one-time - then upon the fact of the provision of a service or the delivery of a project. If I am doing a project, I calculate that I will be doing it for, say, two months. I put there fixed costs for 2 months, the costs that will be associated with the implementation of the project, and add the profit that I would like to receive.

When these three components are assembled, a spending plan or budget appears. From this expense plan, an income plan is formed, a price is formed. If my expenses per month are a thousand dollars, I need a thousand dollars to place an order, and I want to get a profit of a thousand dollars too, the price will be 3 thousand dollars. Having sold the service and received 3 thousand, I am left with an income of a thousand.

How accurate are these forecasts?

There is such an unspoken rule according to forecasts: where profit is planned, it is always divided by two, where taxes are planned, it is always multiplied by three. For other expenses, you need to wind up somewhere around 50%. And then the forecast will most likely come true, and the business will grow and develop normally, which I sincerely wish everyone.

Each of us, without exception, came across the concept of business, and every second thought about how to organize his business, so that it would bring a decent income. Of course, everyone wants to work only for themselves, not depending on outsiders, and at the same time getting good money without putting in special efforts when the business is well developed. But not everyone imagines how much work needs to be invested to create, and most importantly, develop this very business.

It is from ignorance and unpreparedness that many novice entrepreneurs quickly complete their activities. One of the problems, and the most common one, is the mismanagement of the budget, which leads to bankruptcy, and sometimes to huge debts.

In addition, there are other problems that arise when doing business. Therefore, it is worthwhile to understand why business is going on, and what factors influence its unsuccessful development.

Main reasons for failure

As a rule, all the difficulties in developing a business are created by the entrepreneur himself, who, most likely, at the stage of preparing a business plan, miscalculated in any of its paragraphs. There are several reasons that become fatal for the development of an entrepreneur's business:

1. Insufficient control of the expenditure and income of funds from the work of the company.

The problems arise in that if part of the expenses and incomes are still subject to control and analysis in order to further determine the profitability, then there is another part that is often overlooked. It's about advertising a growing business. Every entrepreneur strives to promote his business as quickly as possible and reach the net profit, and in order to ensure this, it is necessary to order high-quality advertising that will work for the company. Often, having ordered such an advertisement, an entrepreneur forgets to keep track of whether it brings at least some income or is just a bright sign that does not attract potential customers. Without tracking the effectiveness of advertising, it will not only bring you profit, but it will also drain the company's budget by a decent amount every month.

The effectiveness of advertising is checked by the amount of profit that was received with its appearance. If the average indicators in comparison with the previous ones have not changed significantly or have not changed at all, then you should refuse this type of service or contact another advertising agency.

2. Uncontrolled reduction in prices for goods and services for the purpose of decent competition.

To date, there are many firms and organizations involved in the provision of various services. Due to such an abundance of competitors, newcomers have a hard time, because customers prefer to contact, as a rule, trusted organizations. In order to somehow attract customers, the entrepreneur tries to make the cost of services lower than that of his competitors. Such manipulations in cash very often negatively affect the profit of the company, which can significantly decrease and become insufficient to cover all the costs of the company.

3. Insufficient development of cooperation with existing customers.

As a rule, all work on the promotion and advertising of a business is based on attracting new customers, otherwise called potential ones. But in essence, it is much easier to pay attention to the products of a customer who has already purchased a service from the company, rather than a new consumer. Often, insufficient customer service leads to zero profit that could be covered by the cash flow of the customers of the already existing customer base.

4.Very an important factor is human laziness.

The desire to get easy money, without making any effort, will accompany the entrepreneur at the very initial stages of forming a business. Due to insufficient attention and lack of timely feedback to this case, major problems may arise with entrepreneurial activity. this work requires special attention and constant monitoring, especially in the initial stages.

5. Rejection modern methods business.

In this case, the entrepreneur refuses to create an additional source of advertising - an Internet site. On the this moment, many use the Internet and draw information from there, which means that creating your own website will attract more attention to your services, especially if the site is correctly and interestingly built.

How to solve business problems

When addressing this issue, do not take drastic actions. Before changing something, it is necessary to analyze, drawn up at the initial stage of organizing the case,. It is he who is a reflection of all the steps that the entrepreneur takes. Based on the data of the plan, it is possible to identify at what point the businessman made a mistake.

It is worth remembering that in order to raise the business from its knees, additional capital investment may be required, since, most likely, the initial capital was not used rationally.
Perhaps, to solve the problem with, you will have to approach it radically, reconsidering the type of services that the company offers. In turn, it is possible to determine whether this is required or not only after analyzing the product market and consumer needs.

Should a newbie start a business?

There are no beginners in this business. Every entrepreneur once started from scratch. You should not be afraid and avoid organizing your business. Correct approach, clear organized work, and own wish and dedication is the main key to success in developing a business idea. In addition to enthusiasm, of course, a sufficient investment will also be required, based on which the entrepreneur will form the entire economic base of the company.
Thus, the development of a business or its stagnation is the result of a correctly or, on the contrary, not properly organized activity of the entrepreneur himself.

After the Internet appeared in almost every home, many people began to use it as a source of income and become entrepreneurs.

Thanks to the World Wide Web, you can start from scratch trading, providing services, and much more that is actively used in our time.

Creating a business is not as difficult as making it work and bring profit to its owner, because not everyone can achieve success, if only because they do not have a sufficient level of information. ?

Business and profit

Anything can be an explanation for this phenomenon, let's look at the most common reasons:

one . Many people are so tolerant and accustomed to treating other people with respect that they sacrifice their own prospects.

You should never forget that you are cooperating with people, you are promoting your own business, and using someone else's services, you should get the proper result.

I am well aware that there are various situations in which it is simply impossible to resolve cases quickly, and the people you work with cite personal problems.

Everyone who belongs to your business should be a responsible person, and if he simply cannot cope with his work, you should not feel sorry for him, but it is better to refuse cooperation and not sacrifice the development of your business.

2. The second reason, which is also quite common, is the psychological preparation of the entrepreneur himself. Entering into business and finance, you need to be prepared for different situations, "falls" and "ups".

If you can’t mentally overcome difficulties or decide at the first profit that you can “slow down”, you are unlikely to succeed.

Promising businessmen they constantly calculate their own actions and psychologically prepare for various conditions in order to take the right actions to solve a difficult situation.

3 . Last reason, which again is very common, is influencing the wrong audience. For example, if you are promoting a banner network, it makes no sense to use blogs about earning money for beginners, because. visitors to such projects do not have their own website and cannot become your clients.

Selection target audience, this is a very important action that you should take seriously, calculating all the subtleties.