Category Archives for "financial management"

understand how money works

Understand Critical Mass and Build a Self-Sustaining Business

By Asa Beavers | financial management

A business is a living thing, and living things change. Like trees, your business is either growing or it’s dying. It’s dynamic and it’s changing. It may be because the economy forces it to, or because customers need change, or because employees change, or because new products and services enter the market, or because a new competitor enters the market. There could be a dozen reasons. But those changes occur, and you may not be aware of them at first. They are often hidden. If the changes are bad, and you’re not on top of them quickly enough, they can destroy your business.

One of the best ways to identify how things are changing in your business is to be plugged into the numbers. When you plug into the numbers you will have a better understanding of what cash flow is and figure out in advance where it’s going to come from.

If your goal is to build a profitable business, here's ideas on how to measure your progress...

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business break even point

Why You Need To Know Your Business Break Even Point

By Asa Beavers | financial management

As a business owner, what keeps you up at night? You’re probably snickering at that question simply because the list of things could go on and on. Well I’ve had the opportunity to ask that question to business owners many times, and the most prominent answer is, cash flow, or should I say lack thereof.

So wouldn’t it be good to know at what point during the month your business achieves the breakeven point? By the way, breakeven is when total revenue equals total costs. After all, up to the point in the month where your business achieves breakeven you haven’t earned a dime of profit yet. All your money has gone to just pay the business operating costs.

Here's a simple formula to calculate your business break even point...

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