The value chain model for an online business

A value chain model are the set of activities required to deliver a product or a service. The essence of a value chain model is creating a set of activities valued by the customers. Activities could be primary in that it directly benefits the customers (e.g. creating content) or it could be supporting which means…

Independent contractors versus employee

It is less expensive to classify a worker as an independent contractor rather than an employee. Moreover, small business owners find it very difficult to deal with the administrative requirement of hiring employees. There is always the temptation to classify employees as independent contractors because of the relative ease of dealing with the contractor status.…

Pricing Strategies – Profit Targeting

One of the questions new entrepreneurs ask is how to price their product. I think a more important question than pricing a product, is how much you get to keep. Profit targeting is when you plan your pricing to incorporate your desired profit level. Business expenses are ether fixed or variable in nature. Knowing if…

Categorizing transactions – Expenses

Before I can explain what an expense is, I will need to talk about costs. A costs is what you give up in your business to make money. A cost can be either an asset or expense. For example, an internet business will need a website so will have to give up cash to host…

Categorizing transactions – Revenue

Revenue is anything you earn in exchange for providing a product, service or an asset for use. Revenue could include cash, cows, dogs, etc. In short, anything you get back in return for providing something of value while running your business is income to you. Obviously, if you get any item other than cash, you…