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How to calculate the most crucial number for your business

Jan 11, 2019

Often the focus in business is all around revenue, but there is one crucial number that service-based businesses need to focus on even more.

Break-even.

Break-even is the minimum amount of income you need to cover all your costs.  It’s the bare minimum number you need to keep your head above water each month.

So how do you figure it out?

Oddly enough, we’ll start with your non-business expenses. Your personal expenses.  While break even is all about the business, we need to understand what you need to be drawing out of the business to look after yourself.  Think of this as your personal break even!

1. Start by writing a list of your personal expenses

These are your portion of the household expenses to keep the house running smoothly. We’re talking mortgage, rent, electricity, telephone, clothing, entertainment, schooling, food. 

If you're already drawing a certain amount out of your business - as a salary or drawings – this is a good...

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Business Financials: Look to the Future, Not Over Your Shoulder

Jul 29, 2018
We have eyes that look forward to where we’re going and whilst some people may say they have eyes in the back of the head, the reality is they don’t.
 
So why is it then, that when we’re looking at finances, we are continually looking backward and not looking to the future? Pilots are at the front of the plane watching where the plane is going, into the future, as they fly us around the world. They’re not looking behind them at where they’ve been. The past is useful and has a place. Pilots use their experiences and lessons learned in the past to help them fly the plane into the future.

SO WE TOO SHOULD BE FOCUSING ON FINANCIAL FIGURES THAT ARE LOOKING INTO THE FUTURE WHILST USING THE HISTORICAL, PAST REPORTS TO GUIDE US.

People in agricultural businesses are great at doing this.
 
Whilst they use their experience over the years, even decades, of growing and harvesting their crops, they are continually looking to the future to make...
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