Do you know what your overheads and variable costs are in your business – have every worried about that? If you have then you must keep up-dating your costing every few month, as they will change as the business grow and changes. Here are a few things to look out for:
- Yearly costs – like insurance, spread them over 12 month and add them to your monthly cost estimate.
- Bank charges – easy to overlook, you may notice your banker never talks about these, check an compare them.
- Fixed costs – rent, rates, utilities bills, make sure you add these to your monthly out goings.
- Time – do you know where and on what all the time in your business is spent – you should – time is money.
- Bad debts – look at your past performance, come up with an average monthly figure and mark your products and services up accordingly.
- Buying – keep control of your spending, make one person sign off on all purchases, ideally that person should be you.
- Keep up to date – update your cost sheet on a regular basis.
- Mark-up – make sure you review your mark-up on a regular basis to protect your margins.
- Budget – create a budget and put it in your cash-flow.
- Cash-flow – compare your cash-flow fore-cast with the actual numbers on a regular basis and learn from it, it’s not about being spot on, but about knowing what happened so you can control it.
The more you know about where your money goes, the easier it is to figure out how to optimise your capital usage for maximum business benefit.
Many small business and start-up business, like SOHO-, SME, SMB-, Micro-, Lifestyle-, Home-, DIY-, Hobby-, Boomer-, Professional-, Personal businesses, fold because they don’t look after the money.
For more of my checklists see the Small Business Checklists category and as always please add to my list with your comments, tell us what works for you.