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Productivity and Profit

Jun 13, 2019

I recently was talking to a client about productivity and the need for being really efficient about how the work is being done. 

This is a service-based business, it's kind of a consulting business, hourly rate, day rate type exercise.They had a job, and just for the purposes of this conversation, it was a $50,000 project. The plan was for $30,000 worth of consulting fees, a certain number of days. The project was done, the delivery was done. The contractor who was doing the days was monitored, and conversations were being had to make sure that the number of days on the job were as per budget and what was planned, and get to the end of the project, and yes, confirmed whatever the number of days were. Yes, those were the number of days. Great. Client thinks project has gone really, really well, we've made the gross profit we thought, and we had a $50,000 project. We've spent 30,000 on our contractors. We've made $20,000 gross profit, which can then be used to pay some overheads....

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Do You Know your Minimum Income Required to Pay your Bills?

Jun 05, 2019

We all know that sales are the backbone of a business, but do you know how much income you need to keep the business going? 

When you start out in business the key is to focus on sales, sales and more sales whilst at the same time there are bills, bills and more bills to pay usually requiring you to use some of your savings to pay the bills.

Over time as your business grows, there will come a time when the income is sufficient to pay the bills. Happy days. The next step at this point is to start to pay yourself a salary (or start drawing from the business if you’re a sole trader) and then as the business grows more, you’ll employ staff to support you.

KNOW THE MINIMUM INCOME YOU REQUIRE.

At each phase of your business, it’s important to know what your minimum income is. This is what accountants call break even as it is when your income equals your expenses. However, there is a trap for young players in this definition as it doesn’t take into account...

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