To make your business profitable, you need a plan. Your passion and qualities are already a great basis, but you still need more. The essential thing you need is a lucrative plan for your company. A plan in which you can see how much revenue you will generate in the coming period, what costs you have and whether there will be enough profit left at the bottom of the line. This gives you focus and ensures that you can achieve your goals. The ultimate steps to make your business profitable are listed in this article.
Mission and product
It is important to establish your mission and start from there. Then, you have to commit yourself to this mission. Why do you want to do this? What is important to you? What do you want in the long term?
In addition, you have to determine which products and services you would like to offer in the coming months. It is best to write all these products and services down.
The products and services written down in the first step should be added to a calendar that includes all months of the year. It is now time to figure out whether your plan is actually feasible. Keep in mind that you could take a few days off and go on vacation. Or for example, that launching three products in one quarter might be a bit too much. Create a visual overview of what you would like to offer in the coming year. This will give you a clear indication of the feasibility.
Revenue and costs
After you make a clear overview of the products and services you will offer and/or sell, you can add prices to it. For example, a rate per hour, per program or per product. In this way, you can calculate the estimated revenue of the upcoming year.
In turn, with business comes costs. What costs do you need to make to accomplish your goals? To start, have a look at the costs that have already been made until now. This offers a lot of insights. Costs for the accountant and energy bills for the office are fixed charges.
Consider carefully for yourself what costs and investments you need to make to realize your plans. Do you want to invest in software? Do you want to expand your team? Do you want to outsource tasks to third parties? For example, if you have a company with a lot of data, you can have this data securely managed by a company specialized in data management. While you make costs for this service, you also save costs in equipment, ICT programs and manpower.
Calculate your profit
Now that you have listed the expected revenue and costs, you can subtract the costs from the revenue. This is how you find out what the estimated profit is. In turn, you pay taxes on this profit. It is of course important that there is still an amount of money left after this.
Adjust goals or costs
Is your estimated profit at the end negative? Then it is important to make several adjustments. Maybe the revenue is too low or your costs are too high. Make sure to adjust your goals and expenses so that you are left with a decent profit from which you can also pay taxes and other expenses.
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