Archive for Starting a Business
Break-Even Analysis – Your simple high value tool
Posted by: | CommentsOne of the trickiest aspects of bringing a new product to market is to estimate the total cost involved in its production. Cost of production effects margin and margin determines how many units must be sold to make a profit. If the number of units sold 
can’t provide sufficient margin at a market acceptable price, then, no matter how good the product is, producing it will result in a loss for the business. The nexus between cost of production, price and units that need to be sold to make a profit, is called the ‘break-even point’.
Break-even analysis is one of the most important financial tools you can use to make better business decisions. Read More→
Sketching Out The Competitive Landscape
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For anyone trying to grow a business, one of the necessary tasks is to map the competitive landscape and continue to keep tabs on how things develop in it over time. With a good understanding of the competition facing your business you’ll be able to spot and exploit opportunities as they develop. Ignoring the competition or letting success lull you into a false sense of security could mean nasty surprises further down the road. The following points can help you start developing a strategy: Read More→
Building Your Loan Package
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If you’re ready to ask your bank for a business loan — whether for a credit line or a term loan — before you make your request be sure you have your ducks in a row. This is your chance to demonstrate to your banker that you’re a sophisticated business person well worthy of the loan.
So, how can you help your loan process along? Make sure you have all the following documents and information ready to go. Read More→
Perils of Unplanned Expansion
Posted by: | CommentsWhen sales are increasing and new opportunities can be sensed, many a business owner’s thoughts turn to expansion. But unplanned expansion can be as detrimental to your business as no growth at all. Fast growth can destabilize a business giving its owners a false sense of well-being while the additional revenues eat up more operating dollars than expected. If expansion is on your agenda, keep these things in mind.
Watch Your Overheads
The biggest danger in expansion is the erosion of a low overhead structure by unjustifiable purchasing or from simply being too busy to keep track of what is happening. Overhead expenses that were under control in the stable business situation now grow rapidly to cover extra expenses associated with a bigger scale of operations – transport, inventory, rental on larger storage space, and all the rest will deplete precious capital. Read More→
