Financials

A person becomes independent in their business by building assets. How does one become truly financially independent with their business? Your main goal as a business is to build assets and then revenue from the assets (rather than building revenue directly). If you have just a product or service you will eventually hit the maturity and decline phase. However, when a business builds asset and then creates system around the

PREDICTING OVERHEAD FOR A PRODUCT BUSINESS I want you to think of a person standing outside in the rain with an umbrella over their head every time I say the work overhead. The word taken in its most literal form means something that stands over the head of something to make sure all parts are covered. Overhead expenses in business is the catch all for other expenses that does not

PREDICTING DIRECT LABOR COST FOR A PRODUCT BUSINESS Previously,  we talked about estimating direct material for a product based business, now we shift our attention to direct labor. There are two main factors one must consider when deciding how much labor is needed to meet the sales forecast. Every business must consider: Number of hours needed Price per hour Number of hours needed: The automate versus hire decision Every business

THREE KPIS  EVERY BUSINESS OWNER SHOULD KNOW BEFORE MAKING NEW INVESTMENTS Occasionally, business owners find it necessary to make capital investments to further the purpose of their business. Capital investments are cash outflows beyond the normal day to day operations of the business. These cash outlays are usually made to increase revenue capacity or reduce cost. It is not financially savvy to make capital investments that bear no future benefits.

We have talked about how to create a budget that coincides with making your product (product cost). What about the budget coincidental to selling and administering the existence of your product. The administrative budget consists of those expenses necessary to run your business but not needed to make your product. Example accounting fees, secretary, office, etc. The selling budget consists of expenses needed to sell the number of unit you